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Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 1 of 185

UNITED STATES DISTRICT COURT


SOUTHERN DISTRICT OF FLORIDA
FORT LAUDERDALE DIVISION
CASE NO. 12-20901-CR-WPD
UNITED STATES OF AMERICA,

.
.
Plaintiff,
. Fort Lauderdale, Florida
. July 1, 2013
v.
. 9:31 a.m.
.
CRAIG STANLEY TOLL,
.
.
Defendant.
.
. . . . . . . . . . . . . . . .
- - - - Transcript of Trial Proceedings had
before the Honorable William K. Dimitrouleas,
United States District Judge, and a jury.
- - - - DAY 6
- - - - APPEARANCES:
For the Plaintiff:
Lois Foster-Steers, Esq.
Kimberly A. Selmore, Esq.
Assistant U.S. Attorneys
99 N.E. 4th Street
Miami, Florida 33132
For the Defendant:

Richard A. Sharpstein, Esq.


Jacqueline M. Arango, Esq.
Ari Gerstin, Esq.
Akerman Senterfitt
One SE 3rd Avenue, 25th Floor
Miami, Florida 33131

Court Reporter:

Francine C. Salopek, RMR, CRR


Official Court Reporter
United States District Court
299 E. Broward Blvd., Room 205F
Fort Lauderdale, Florida 33301
(954)769-5657
- - - - Proceedings recorded by mechanical stenography, transcript
produced by computer.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 2 of 185

MONDAY, JULY 1, 2013, 9:31 A.M.

(The Judge entered the courtroom)

THE COURT:

Counsel are present.

Anything to come before the Court before we bring the

All right.

Mr. Toll's present.

jury in?

MR. SHARPSTEIN:

MS. FOSTER-STEERS:

THE COURT:

10

We're back on the record.

No, your Honor.


No.

I guess we need to get Mr. Smith back in.

I had some hearing set for nine o'clock this morning.

11

I had it postponed for this afternoon.

12

starting up this afternoon until two.

13

start at 9:30.

So, we won't be
And then tomorrow we'll

14

Mr. Smith, you understand you're still under oath?

15

THE WITNESS:

16

THE COURT:

17

(The jury entered the courtroom)

18

THE COURT:

19

I do.

All right.

Let's bring in the jury.

Counsel concede the presence of the jury

and waive its polling?

20

MS. FOSTER-STEERS:

21

MR. SHARPSTEIN:

22

THE COURT:

Yes, your Honor.

Yes, your Honor.

And did everyone follow my admonition not

23

to discuss the case or allow it to be discussed in your

24

presence?

25

All right.

Tomorrow we're going to start at 9:30.

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 3 of 185

think I said nine o'clock last week, but we'll start at 9:30

tomorrow.

at about 4:30, and then Wednesday we'll start at 10:30.

I'll remind you today and tomorrow about those start-up times.

I have to break a little bit early tomorrow night,

All right.

Ms. Foster-Steers, you may proceed.

MS. FOSTER-STEERS:

8
9

But

I think we're ready to resume.

Thank you, your Honor.

DIRECT EXAMINATION (CONTINUED)


BY MS. FOSTER-STEERS:

10

Q.

Mr. Smith, when we left off on Friday, we had talked about

11

a financial statement that was submitted to OPIC during the

12

period of time that you were negotiating with Cameron Alford

13

with respect to a $10 million loan.

14

A.

Yes.

15

Q.

And, in fact, sir --

Do you remember that?

16

(Discussion had off the record between counsel)

17

MS. FOSTER-STEERS:

18

May I approach the witness, your

Honor?

19

THE COURT:

Okay.

20

BY MS. FOSTER-STEERS:

21

Q.

22

as Government's Exhibit C(4), which is an e-mail from Craig

23

Toll, dated January 28, 2010, to Lynn Tabernacki, attaching

24

consolidated unaudited September 30 financials.

25

that, sir?

I'm handing you back what has been admitted into evidence

Do you see

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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A.

Yes.

Q.

Had you seen those financials, Mr. Smith, during your

negotiations with OPIC in that time period?

A.

I'm honestly not sure.

Q.

Well, these are financial statements, sir, for the period

ending September 30, 2009, and December 31, 2008.

that, sir?

A.

Yes.

Q.

And if we look at the loan agreement, sir, under the

Do you see

10

section called "Representations and Warranties," Section 303 --

11

I'm sorry -- 301(c), this particular section references a

12

financial statement which had been sent to OPIC for the period

13

ending September 30, 2009.

14

A.

Yes.

15

Q.

Okay.

16

Exhibit C(4)?

17

A.

They would appear to be.

18

Q.

Now, the financial statements that were submitted to OPIC,

19

Mr. Smith, they had to be complete and correct and fairly

20

present its financial condition -- when I say "its," I'm

21

talking about InnoVida -- as of the period then ended, correct,

22

sir?

23

A.

Yes.

24

Q.

Was it your understanding, Mr. Smith, that the financial

25

statements reflected in Exhibit C(4) were, in fact, the true,

Do you see that?

Were those, those same financials that we see in

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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correct, and complete financial statements for InnoVida for the

periods ending December 31, 2008, and September 30, 2009?

A.

That would be my understanding.

Q.

Okay.

submitted to OPIC were to have been done according to GAAP,

right --

Now, also, the financial statements that were

MR. SHARPSTEIN:

BY MS. FOSTER-STEERS:

Q.

-- GAAP?

10
11

Objection.

MR. SHARPSTEIN:

This is repetitious from exactly what

we did on Friday.
THE COURT:

12

I'll allow some latitude.

13

BY MS. FOSTER-STEERS:

14

Q.

15

GAAP, correct, sir?

16

A.

Yes.

17

Q.

All right.

18

clear.

They were supposed to have been submitted according to

And it's set out in the loan agreement very

We're looking now at Section 6.05, right?

19

"The parent company and the project company

20

shall... prepare its financial statements in

21

accordance with GAAP."

22

Do you see that?

23

A.

Yes.

24

Q.

Was it your understanding, Mr. Smith, back in the period

25

when you were negotiating with OPIC, that the financial


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 6 of 185

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statements set forth in Government's Exhibit C(4) were, in

fact, prepared according to GAAP?

A.

That would be my understanding.

Q.

You dealt with Cameron Alford, correct, sir?

A.

Yes.

Q.

And you submitted -- or, rather, several different

financial statements were submitted to OPIC during your

negotiations with OPIC, correct, sir?

A.

It's -- I believe at least one set of financials were

10

submitted during our period of representation, perhaps more.

11

Q.

12

financial statements, correct, sir?

13

A.

That was a requirement of the loan agreement.

14

Q.

In fact, if we look at Section 6.06 of Government's

15

Exhibit C(7)(a), we see that InnoVida was required to submit

16

financial statements -- and let's look directly at this

17

section, 6.06(a)(i) -- "within 90 days after the end of each

18

fiscal quarter (other than the fourth fiscal quarter) of each

19

fiscal year, unaudited consolidated financial statements for

20

the parent company and a comparison between such financial

21

statements and the budget for such fiscal quarter, furnished

22

pursuant to 6.06(e), all certified by the chief financial

23

officer of the parent company as being complete and correct,

24

together with such officer's certificate."

25

Okay.

And even afterwards, InnoVida was required to submit

Do you see that?


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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A.

Yes.

Q.

So, did InnoVida, in fact, submit financial statements

pursuant to this particular section?

A.

Yes.

Q.

And what was your understanding of those financial

statements that were submitted pursuant to this section of the

loan agreement, Mr. Smith?

A.

is they were a set of unaudited financials that set forth a

10

balance sheet and an income statement for 2009, year-end of

11

2009 and the year-end of 2008.

12

Q.

13

that?

14

A.

Yes.

15

Q.

Are you familiar with this document?

16

A.

That appears to be the financial statements that were sent

17

during the term of our engagement.

18

Q.

Okay.

19

A.

Right.

20

Q.

And we see here that it's for the period ending

21

December 31, 2009, and December 31, 2008, right?

22

A.

Yes.

23

Q.

Now, did these financial statements meet the requirements

24

of the loan as negotiated between InnoVida by you and OPIC?

25

A.

The -- I would have to see them again, but my understanding

Let's look at Exhibit C(11), Bate ending '3055.

Do you see

For InnoVida, correct, sir?

I'm not in a position to answer that.


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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Q.

You're not in a position to answer that?

A.

No.

financials be true and correct in all respects.

position to know whether they are or are not.

Q.

Who would?

A.

Presumably the company.

Q.

Okay.

company and submit them to --

A.

I mean -- the requirements of the loan are that these


I'm not in a

Who would be?

But did you gather financial statements from the

I received these from the company, and I submitted them to

10

OPIC.

11

Q.

12

obtained from the company to OPIC, was it your understanding

13

that these financial statements met the requirements of the

14

loan agreement?

15

A.

It was.

16

Q.

In looking at Exhibit C(11) here, what does it say as the

17

cash and cash equivalents for the period ending December 31,

18

2009?

19

A.

$39,296,232.

20

Q.

Okay.

21

A.

$37,044,439.

22

Q.

Okay.

23

top, what did you think -- or did you even look at those two

24

words back in 2010?

25

A.

Okay.

And in submitting the financial statements that you

And for December 31, 2008?

Now, looking, sir, at the words "pro forma" at the

I assumed that it meant that it was a pro forma combination


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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of balance sheets for various members of the InnoVida group.

Q.

Okay.

A.

In this case, it was -- be an addition of all those numbers

together.

Q.

An addition of all those numbers?

6
7

10

Okay.

Now, the word "pro forma," sir, you said -- does it -does -- "pro forma" means that any information has been --

8
9

And what does "pro forma" mean to you?

MR. SHARPSTEIN:

Objection to the form of the

question, but to the line of questioning, which was done


extensively on Friday.

11

THE COURT:

Overruled.

12

BY MS. FOSTER-STEERS:

13

Q.

14

information has been excluded?

15

A.

I'm not sure I understand the question.

16

Q.

Okay.

17

Bate Number ending '3055, can you tell whether or not any

18

information has been excluded?

19

A.

No.

20

Q.

Do you see, sir, anywhere here where there are any

21

disclosures, sir?

22

A.

23

some description of what's the components of this balance

24

sheet?

25

Q.

Mr. Smith, does the term "pro forma" to you mean that any

When we look at this balance sheet, Exhibit C(11),

I understand you're using the term "disclosure" to mean

Yes.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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A.

Yeah, there's the word "unaudited pro forma."

Q.

I'm sorry?

A.

There's the word "unaudited pro forma."

disclosure.

Q.

understanding of the term "unaudited pro forma" back then?

A.

No.

Q.

Did you submit these forms, Mr. Smith, as being financial

statements that met the requirements of the agreement?

Okay.

That would be the

Did you explain to any member of OPIC your

10

A.

I submitted these financials as the ones provided by the

11

company in response to my request for financials that met the

12

requirements of the loan agreement.

13

Q.

14

that met the terms of the loan agreement, correct, sir?

15

A.

Yes.

16

Q.

Okay.

17

A.

Craig Toll.

18

Q.

Okay.

19

A.

These financial statements.

20

Q.

Okay.

21

what did you do with these statements?

22

A.

I forwarded them to OPIC.

23

Q.

And if we look at the combined statement, the operations,

24

from the same exhibit, C(11), Bate Number ending '3057,

25

combined statement of operations for the same period ending

Okay.

So, you did, in fact, request financial statements

And who did you make that request of?

And in response to your request, what was provided?

And those statements having been provided to you,

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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December 31, 2009, and December 31, 2008, at the bottom, the

net income, how much is that?

A.

$15,605,029.

Q.

And for the period ending December 31, 2008, what is that

number?

A.

$6,615,640.

Q.

What do those figures mean to you, Mr. Smith?

A.

They represent the net income of the company on a combined

basis.

10

Q.

And do they show profits?

11

A.

Yes.

12

Q.

I want you to look at Government's Exhibit C(22).

13

now the consolidated balance sheet for the period ending

14

March 31, 2010.

15

This is

Have you seen that document before?

16

A.

I may have.

17

Q.

This is the front of Exhibit C(22), which is an e-mail

18

dated September 8, 2010, from Craig Toll.

19

I don't recall.

Are you cc'd on this e-mail, sir?

20

A.

I am.

21

Q.

This is now the same page I was showing you before, which

22

is the consolidated balance sheet for the period ending

23

March 31, 2010.

24
25

Had you seen that document, sir?


A.

If it was attached to that e-mail, I -- I probably saw it.


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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Q.

Okay.

Now, was this, sir, a financial statement that you

had requested from Craig Toll as -- that you requested from

Craig Toll?

A.

I don't recall.

Q.

Okay.

required to be provided according to Section 6.06 of the loan

agreement?

A.

Yes.

Q.

Okay.

Would this have been a financial statement that was

Now, just looking back at that statement, sir,

10

looking here (indicating), are there any disclosures made on

11

here as to the balance sheet?

12

A.

Other than the words "unaudited pro forma," no.

13

Q.

And the disclosure that you say are reflected in the words

14

"unaudited pro forma," what is that?

15

A.

16

balance sheet of the various companies in the InnoVida group.

17

Q.

18

InnoVida companies, was it your understanding that any

19

information had been omitted from this balance sheet?

20
21

Once again, my understanding was that this was a combined

And being the combined balance sheet of various other

MR. SHARPSTEIN:

Objection to the form of the

question, vague.

22

THE COURT:

Overruled.

23

A.

Assuming I looked at this financial statement, I would have

24

assumed that there was no information excluded from it.

25

Q.

That there was no information excluded from it?


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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A.

That's right.

Q.

Okay.

A.

Why do I say which part of that?

Q.

Okay.

that you would have assumed that no information had been

excluded from this particular document?

A.

Well, there's no reference to any exclusion.

Q.

Sorry?

A.

There's no reference to any exclusion.

10

Q.

Okay.

11

had been information excluded from this balance sheet, would

12

you have expected that there would have been a reference to the

13

excluded information?

14

A.

Yes.

15

Q.

Do you see that here?

16

A.

No.

17

Q.

And looking now at Bate Number '1788 from Exhibit C(22),

18

this is a combined statement of operations for the period

19

March 31, 2010.

20

And why do you say that?

Why do you say, just looking at this balance sheet,

All right.

So, my question to you then, if there

Do you see here, sir, anywhere, any reference that any

21

information was excluded from this combined statement of

22

operations for the period ending March 31, 2010?

23

A.

No.

24

Q.

Would you have expected that if any information was

25

excluded, it would have been referred to here?


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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A.

Yes.

Q.

Why is that?

A.

(No response)

Q.

Why -- well, let me ask you this question.

In your dealings with InnoVida with other clients,

have you looked at financial statements?

A.

Yes.

Q.

Okay.

is it your experience that it is referenced on the documents?

And if a financial statement excludes information,

10

A.

Yes.

11

Q.

Okay.

12

A.

Otherwise, the information would be incomplete.

13

Q.

It would be incomplete?

14

A.

(No response)

15

Q.

Yes?

16

A.

Yes.

17

Q.

Would it be misleading?

18

A.

Yes, I believe it would be misleading.

19

Q.

And here, where there's no reference to any excluded

20

information, would this document be misleading?

21

A.

22
23

And why is that?

Pardon?
MR. SHARPSTEIN:

Objection to the form of the

question.

24

THE COURT:

25

MS. FOSTER-STEERS:

Sustain.
Okay.

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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BY MS. FOSTER-STEERS:

Q.

I can show it to you -- is this another balance sheet,

Mr. Smith?

A.

Yes.

Q.

Sure.

Looking now at Exhibit C(26) -- and if you want the e-mail,

Can you show me the e-mail?

(Discussion had off the record between counsel)

BY MS. FOSTER-STEERS:

Q.

This is Exhibit C(26).

See?

And it's an e-mail dated

10

Tuesday, September 28, 2010.

11

A.

Yes.

12

Q.

And you are copied on this e-mail.

13

A.

Yes.

14

Q.

Attached to the e-mail is a consolidated balance sheet, and

15

it's Bate Number '2280 from the same exhibit.

16

Do you see that?

Do you see that, sir?

Had you seen that?

17

A.

I was copied on the e-mail.

18

Q.

Okay.

19

Mr. Smith, are there any references here to any information

20

excluded from this balance sheet?

21

A.

And with respect to this particular balance sheet,

No.

22

MR. SHARPSTEIN:

23

strike.

24

anything excluded.

25

I probably looked at it.

The -- I'm objecting and moving to

I don't understand the question "excluded," was

THE COURT:

He -Overruled.

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


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MR. SHARPSTEIN:

THE COURT:

It's confusing to the jury.

Overruled.

BY MS. FOSTER-STEERS:

Q.

'2283, for the period ending June 30, 2010.

This is now the statement of operations, Bate Number ending

What is the net income reflected on this particular

statement of operations, Mr. Smith?

A.

$5,903,169.

Q.

Is that a profit for InnoVida?

10

A.

Yes.

11

Q.

And just looking on this particular page, are there any

12

references to any other information on this document, sir?

13
14

MR. SHARPSTEIN:

Objection to the form of the

question.
THE COURT:

15

Overruled.

16

BY MS. FOSTER-STEERS:

17

Q.

Do you see anything?

18

A.

Yeah, other than the reference to the fact that the balance

19

sheet is an unaudited pro forma -- excuse me -- income

20

statement, unaudited pro forma income statement.

21

Q.

22

term "unaudited pro forma" with anyone at OPIC?

23

A.

No.

24

Q.

In your mind, sir, the financial statements as submitted to

25

OPIC, did they comply with the Section 6.06 of the loan

Now, did you have any discussions, Mr. Smith, about the

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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agreement?

A.

Well, I think the answer to that question would be no.

Q.

No, they did not comply?

A.

Well, the definition of the term "financial statement" in

the loan agreement was the financial statement prepared in

accordance with GAAP.

GAAP requires the inclusion of a footnote disclosure.

these financial statements had that.

face they did not have that.

As I said previously, in my experience,


None of

It was evident on their

So, from that perspective, they

10

did not comply with GAAP.

11

Q.

Okay.

12

A.

Just to move this along, they would have fallen within the

13

representation of warranty set forth in the loan agreement that

14

they be -- fairly present the information set forth.

15

of the representation would have applied to what was provided.

16

Q.

What part of what representation, sir?

17

A.

The representation that the unaudited pro forma income

18

statement and balance sheet should have fairly presented the

19

information it purported to represent.

20

Q.

Okay.

21

A.

I don't know if they are or are not, but that was what they

22

were purported to be, and they on their face would have

23

appeared to have complied with that requirement.

24

Q.

25

That part

So, they were not.

I'm not following you, sir.


The representation and warranties provided that the
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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financial statements be prepared according to GAAP, correct?

A.

Yes.

Q.

Okay.

at you're saying did not comply with that particular section of

the loan agreement?

A.

financials, that they lacked footnote disclosure.

Q.

agreement?

And the financial statements that we've just looked

They were not, in my experience, be viewed as GAAP

Okay.

So, did they comply with the terms of the loan

10

A.

No.

11

Q.

Okay.

12

OPIC as being compliant with the loan agreement?

13

A.

14

company proposed to submit to fulfill that particular

15

condition.

16

footnote financial statements and were not prepared in

17

accordance with GAAP for that reason.

And did you submit these financial statements to

I submitted them as the company's -- the document the

18

I was aware that they did not contain un --

Frequently lenders waive conditions to funding, and I

19

assumed that the OPIC would make its own decision regarding

20

whether it would fund or not based on looking at those

21

financials.

22

Q.

23

with Cameron Alford?

24

statements should be made according to GAAP?

25

A.

Okay.

Well, wasn't this a term that you had negotiated


The section that says that the financial

Yes.
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Q.

Okay.

And you saw financial statements that you've just

told us on its face did not appear to be prepared according to

GAAP, right?

A.

prepared in accordance with GAAP.

Q.

statements that complied with the --

A.

to OPIC, had footnote disclosure.

It was evident on the face of the document that it wasn't

Okay.

Well, did you submit to OPIC any other financial

None of the financials that were submitted to the company,

10

Q.

None of them.

11

A.

That's right.

12

Q.

So, none of them complied with GAAP.

13

A.

That's right.

14

Q.

And none of them, therefore, complied with the terms of the

15

loan agreement, correct?

16

A.

From a technical perspective, that's accurate.

17

Q.

Okay.

18

about?

19

A.

20

every loan agreement contains numerous conditions to closing.

21

Every borrower submits a series of documents in an attempt to

22

establish that it's complied with the conditions to the extent

23

deemed satisfactory by the lender.

24

to waive any and all of those conditions.

25

instance, it's my understanding that OPIC waived the

When you say "technical," what are you talking

The -- the conditions to the loan agreement, there's --

The lender has the ability


In this particular

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requirement that the financials contained footnote disclosure.

Q.

Who made that waiver?

A.

I would presume it would be Lynn Tabernacki or someone at

OPIC.

Q.

And who communicated that waiver to you?

A.

The waiver was communicated to us by virtue of the fact

that the OPIC funded the initial tranche of the loan.

Q.

3.3 million, are you saying that that constituted a waiver by

10

OPIC as to whether or not the financial statements should be

11

made according to GAAP?

12

A.

13

disclosure clearly was waived by OPIC, because they didn't have

14

those.

15

Q.

They didn't have them.

16

A.

They didn't have any footnote disclosure, so....

17

Q.

Well, did you, Mr. Smith, ever disclose to OPIC or tell

18

them that the financial statements should have footnotes?

19

A.

No.

20

Q.

No.

You're -- okay.

So, by OPIC funding the -- that 3.2 --

The requirement that the financials contain footnote

21

Okay.

22

(Discussion had off the record between counsel)

23

BY MS. FOSTER-STEERS:

24

Q.

25

for the disclosures, is it your information (sic) that the

Mr. Smith, other than, as you just had told us, the waiver

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information contained in the financial statements submitted to

OPIC contained true and accurate information --

A.

It was my understanding, yes.

MR. SHARPSTEIN:

Objection to the repetitious line of

questioning on a direct line of questioning with their own

witness.

THE COURT:

Overruled.

BY MS. FOSTER-STEERS:

Q.

Did you hear the question?

10

A.

Can you repeat the question?

11

Q.

Yes.

12

Other than the waiver of the disclosure that the

13

financial statements not contain any footnotes, was it your

14

understanding that the information in the financial statements

15

were true, accurate, and complete?

16

MR. SHARPSTEIN:

That's the fifth time that question

17

has been asked, your Honor.

18

THE COURT:

19

A.

Overruled.

Yes.

20
21

Move to strike.

MS. FOSTER-STEERS:

May I have just one second, your

Honor?

22

THE COURT:

23

(Discussion had off the record between counsel)

24

MS. FOSTER-STEERS:

25

Okay.

I have no further questions, your

Honor.
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THE COURT:

Cross-examination.

MR. SHARPSTEIN:

May it please the Court.

CROSS-EXAMINATION

3
4

BY MR. SHARPSTEIN:

Q.

Good morning, Mr. Smith.

A.

Good morning.

Q.

I think you told the jury on Friday that you've been a

lawyer for 32 years with Shutts & Bowen.

A.

That's true.

10

Q.

That's -- and for those 32 years, have you done the same

11

type of work?

12

A.

Yes.

13

Q.

So, you've been involved in commercial transactions for

14

three decades.

15

A.

That's true.

16

Q.

And you've represented many companies in very serious and

17

large transactions, isn't that right?

18

A.

That's true.

19

Q.

As you did here with InnoVida, you represented a client in

20

negotiating with another party a contract, correct?

21

A.

Yes.

22

Q.

I mean that's something you do every day.

23

for 30 years plus, right?

24

A.

Yes.

25

Q.

And just so the jury understands, when there's -- you're a

You've done it

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lawyer for one party, there's a lawyer for the other side, as

well, is there not?

A.

Yes.

Q.

That would be Mr. Cameron Alford in this case, right?

A.

Yes.

Q.

He's a lawyer that works for OPIC, just like you work for

your client, to negotiate terms in a contract, right?

A.

Yes.

Q.

And either party, as Ms. -- the prosecutor has asked you,

10

either party can object to particular clauses or parts of a

11

contract, correct?

12

A.

Yes.

13

Q.

Either party, through their lawyer, can complain about, we

14

don't want this, we don't want that, and then you come to a

15

meeting of the minds, correct?

16

A.

Yes.

17

Q.

And when there's a meeting of the minds, there's a signed

18

contract, both parties sign, both parties agree, correct?

19

A.

Yes.

20

Q.

And if, in fact, along the way a party decides that one of

21

the parts of the contract, one clause wasn't complied with,

22

that party can say, we're not going through with this.

23

A.

That's -- that's true.

24

Q.

And that happens all the time, does it not?

25

A.

Yes.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
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Right?

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Q.

If during the course of negotiations or discussions one

party sees something and says, that's not what we agreed to,

they don't have to go with the contract, right?

A.

That's true.

Q.

I think you were trying to tell that to the prosecutor a

couple of times here, that they, OPIC, could have objected to

financial statements or things of that nature, if they believed

they didn't comport with the contract, right?

A.

That's true.

10

Q.

So, let's go back now.

11

things the prosecutor talked to you about.

12

And I'll focus you on some of the

And here InnoVida was your client, correct?

13

A.

Yes.

14

Q.

And InnoVida came -- and, by the way, Shutts & Bowen is a

15

law firm -- one of the oldest law firms in Florida, isn't it?

16

A.

We were found in 1910.

17

Q.

1910, over a hundred years ago.

18

A.

Yes.

19

Q.

And it's a well-established firm with many well-established

20

lawyers that have done some of the most serious work in all of

21

Florida over these years, correct?

22

A.

That's true.

23

Q.

And so, this client, InnoVida, came to you through -- I

24

think you said it was your partner, Harold Patricoff.

25

A.

Right?

That's true.
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Q.

Sometimes known as Ed Patricoff?

A.

Yes.

Q.

And Ed Patricoff brought you Mr. Osorio through a referral

that he got from former President Bill Clinton, correct?

A.

That's my understanding.

Q.

Patricoff came to you and said, former President Clinton

referred me a client, I'm gonna refer them to you, they have

some dealings, they're gonna be dealing with OPIC, right?

A.

That's my understanding.

10
11

MS. FOSTER-STEERS:

Calls for hearsay, your Honor.

Objection.

12

THE COURT:

13

MS. FOSTER-STEERS:

14

MR. SHARPSTEIN:

I'm sorry?
Calls for hearsay.

Just following up.

15

that asked about Patricoff.

16

THE COURT:

She's the one

I'll allow it for the fact it was said,

17

not for the truth of the matter asserted.

18

BY MR. SHARPSTEIN:

19

Q.

Excuse me.

20

And so, you got the client, you met, you talked to

21

Mr. Osorio, correct?

22

A.

Yes, I spoke with Mr. Osorio.

23

Q.

I mean I think you said it was a phone call or something at

24

first.

25

A.

There was an early call, I believe Mr. Osorio was on the


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phone.

Q.

from him what type of business InnoVida was?

A.

the business to me.

Q.

that time, when it came to you, in 2009, that it was a business

that was selling, for lack of a better term, factories in a

box, isn't that right?

And during that course, did you discover from him or learn

I don't recall whether it was him or Mr. Toll who described

Eventually you learned that InnoVida was a business that at

10

A.

Essentially, yes.

11

Q.

And so the jury understands that, the company was selling

12

joint venture interests in building factories that produced

13

these panels to build low-income housing, correct?

14

A.

15

other than with respect to the Haiti Project, I have no

16

knowledge of that.

17

Q.

18

something that was said a lot around InnoVida.

19

A.

Yes.

20

Q.

And you knew that at that particular point in time, that

21

the money that was made by InnoVida was being made by selling

22

these joint ventureships, correct?

23

A.

24

they raised revenue specifically.

25

fabricated home business and generated revenues from that

That -- the exact nature of how they operate the business,

Okay.

But you learned about "factory in a box."

That was

I wasn't -- I didn't ask nor get any details regarding how


I knew they were in the

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business.

Whether it was in a joint venture or some other

form, I don't know.

Q.

but....

We'll get to a couple of issues on that down the road,

So, when you got the file that you were told, you knew

that InnoVida had already been approved by OPIC for a loan, and

you were gonna negotiate the terms of the loan, the contract,

correct?

A.

That's correct.

10

Q.

So, by the time you already got it, InnoVida already had

11

approval from Ms. Tabernacki for the loan pending the execution

12

of the contract.

13

A.

That was my understanding.

14

Q.

This happens a lot in commercial loan transactions, doesn't

15

it?

16

A.

Yes.

17

Q.

A lender, whether it be a bank or a private equity company,

18

will meet with someone, take preliminary information, approve

19

the loan, and then execute a contract.

20

A.

Yes.

21

Q.

It's typical.

22

A.

Yes.

23

Q.

There's nothing unusual about that here.

24

A.

No.

25

Q.

And eventually you sat with Mr. Toll, who provided you
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information, correct?

A.

telephone and e-mail.

Q.

Telephone and e-mail.

A.

Yeah.

Q.

And he -- you needed information, he provided you

information, correct?

A.

That's correct.

Q.

If you had an issue with something you saw, you asked him,

I communicated with Mr. Toll almost exclusively by

10

he provided it to you, correct?

11

A.

That's correct.

12

Q.

And then if you had -- and you communicated with OPIC

13

through Mr. Alford and Ms. Tabernacki.

14

A.

Yes.

15

Q.

Who was your major contact at -- there?

16

A.

Principally Cameron Alford.

17

Q.

Who was the lawyer.

18

A.

Right.

19

Q.

Representing them.

20

A.

Yes.

21

Q.

I mean you assumed, for the purpose of this, he worked for

22

a large government agency, that he was a competent, qualified

23

lawyer, correct?

24

A.

Yes.

25

Q.

You knew that OPIC was in the business of giving out large

Was it Alford?

Correct?

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commercial loans to multinational companies, American companies

doing business overseas, and they were in the business of

giving out large loans, correct?

A.

Yes.

Q.

I'm sure you assumed Mr. Alford was a very competent

lawyer.

A.

Yes.

Q.

Anything during the course of your relationship with him

give you any other reason to believe anything otherwise?

10

A.

No.

11

Q.

The prosecutor asked you a lot of questions about financial

12

statements that were attached.

13

the financial statements as a matter of course are provided by

14

companies to lenders on a regular basis, correct?

15

A.

Yes.

16

Q.

And there was a term in this contract that required

17

financial statements to be produced, correct?

18

A.

Yes.

19

Q.

You particularly negotiated the fact in the agreement that

20

these financial statements would be -- that the company had

21

provided unaudited financial statements, isn't that right?

22

A.

Yes.

23

Q.

As a matter of fact, that became an issue, because

24

initially you became aware of the fact that OPIC required

25

audited financial statements, correct?

So, just to clarify this point,

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A.

Yes.

Q.

And they specifically waived that requirement with you,

isn't that right?

A.

That's not entirely accurate.

Q.

Well, what it -- tell the jury what --

A.

They agreed to postpone the date on which the audited

financial statements were required to be produced.

Q.

Postponed.

A.

Yes.

10

Q.

In the future.

11

A.

Yes.

12

Q.

So, they didn't require audited financials before the loan

13

was funded.

14

A.

No.

15

Q.

They understood, to the best of your belief, that they were

16

getting unaudited financial statements, correct?

17

A.

Yes.

18

Q.

And, again, the jury's heard a lot about these terms, but

19

audited financials are audited by an independent CPA firm or

20

financial firm that looks at behind the information on the

21

financials to verify it, correct?

22

A.

Yes.

23

Q.

And these were clearly not audited financials, correct?

24

A.

That's correct.

25

Q.

And the companies -- and OPIC specifically postponed that


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requirement to a date in the future.

I believe it was

August 31, 2009, correct?

A.

Yes.

Q.

Ten -- I'm sorry -- 2010.

A.

I don't recall the precise date, but they were postponed.

Q.

And the -- when the prosecutor showed you what I'll put up

as C(4), I think you told her on a number of occasions here

that the words in the corner of all of the financials that

we've seen say "unaudited pro forma," correct?

Correct?

10

A.

That's correct.

11

Q.

I mean -- and you said to the prosecutor on a number of

12

occasions that that's a disclosure to someone that's looking at

13

this, right?

14

A.

Yes.

15

Q.

Because anybody -- a lawyer involved in a transaction, a

16

commercial transaction, that would look at that would see

17

clearly that that's a disclosure that these financials are

18

unaudited and pro forma, right?

19

A.

Yes.

20

Q.

And you said to the prosecutor when she read the

21

requirement in the contract that these comport -- that the

22

financial -- the definition of "financial statements" requires

23

that the financials presented comport with GAAP remember those

24

questions?

25

A.

Yes.
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Q.

occasions that clearly on their face these did not comply with

GAAP, correct?

A.

That's correct.

Q.

Because anybody that's been -- not anybody -- a qualified,

competent lawyer, or individual lender, that's been involved in

these transactions would know by looking at this and seeing

unaudited pro forma, it doesn't comply with GAAP, right?

A.

Yes.

10

Q.

Did anybody -- did Mr. Alford or Ms. Tabernacki at any time

11

communicate to you, these are unacceptable, we want GAAP

12

financials, we're not gonna accept these unaudited pro forma

13

financials?

14

A.

No.

15

Q.

Was it ever --

16

A.

Well, I take -- let me restate that.

17

second disbursement of the loan, one of the reasons that OPIC

18

refused to grant the second disbursement was that the audited

19

financial statements had not been completed.

20

Q.

The audit hadn't been done.

21

A.

Right.

22

Q.

That's way down the road here, though.

23

A.

In September.

24

Q.

September.

25

And I think you've told the jury now on a number of

With respect to the

But here, we're looking at the initial disbursement,


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because I believe that's what the prosecutor was asking you

about.

A.

She asked me about all of them, but --

Q.

Well, we're going -- here, we're -- this is C(4), so these

are the financials that were submitted, I think you said,

before you even got involved.

A.

That's correct.

Q.

So, you hadn't really seen these, but I'm -- you saw later

ones that I'll get to.

10

The question is, this deals with the initial

11

disbursement.

This was before OPIC even provided the

12

$3.3 million.

13

A.

That's correct.

14

Q.

So, again, you said something -- "pro forma" means a

15

combination of companies, that this was the combination of the

16

balance sheets of all of the InnoVida companies, correct?

17

A.

That's correct.

18

Q.

There were a number of companies in different parts of the

19

world that owned all these factories, right?

20

A.

There were a large number of InnoVida subsidiaries.

21

Q.

And so, you're saying that they presented this unaudited

22

pro forma by adding all the balance sheets together of all the

23

different companies?

24

A.

25

given the words "pro forma" in this situation.

That would be the ordinary interpretation I would have

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Q.

And you said something to the jury that might not be

meaningful to them, or to me, which is that they eliminated all

intercompany transfers, right?

A.

Right.

Q.

What does that mean?

A.

Well, if one subsidiary owed money to another subsidiary,

when you added it all together, ordinarily those intercompany

transactions would be deleted.

was owed a hundred million dollars from company B, and

You wouldn't -- if company A

10

company B was owed a hundred million dollars from company A,

11

you wouldn't put $200,000,000 of receivables, because you'd be

12

double-counting in that situation.

13

Q.

14

conversations with Mr. Alford or Ms. Tabernacki about the

15

financial statements themselves?

16

A.

No.

17

Q.

Now, while we're on this, I have here -- that's my messy

18

orange highlighting there -- but under "current assets, cash

19

and cash equivalents," 35 million-plus dollars.

20

that?

21

A.

Yes.

22

Q.

I mean that indicates that this company has in the bank

23

somewhere cash in that amount.

24

came from?

25

A.

Okay.

Do you ever remember having any specific

Do you see

Do you know where that number

No.
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Q.

And that would be significant on this balance -- on this

asset sheet.

relation to the total current assets of the company, correct?

A.

Yes.

Q.

Another thing, if you look at the final page of -- which is

'3031 on the Bates Number of this, the -- Ms. -- the prosecutor

asked you about revenues of this company.

"unaudited pro forma," factories -- "revenues from factories,"

$30,000,000 plus.

That's the substantial amount of money in

Again, under

See that?

10

A.

Yes.

11

Q.

And so, that's revenues from the sale of factories?

12

A.

I don't know precisely what it was.

13

Q.

Well, what you can tell from this, though, if we look a

14

little closer, is finished goods, go over here, zero.

15

that?

16

A.

Yes.

17

Q.

So, anybody, any lender, anybody looking at this, and

18

particularly OPIC, would look at this company and see that they

19

haven't made a penny selling the goods of the company by the

20

end of September of '09, correct?

21

A.

That's correct.

22

Q.

And that's not -- that's very fundamental.

23

OPIC would have an understanding -- or the lender, OPIC, would

24

have an understanding that the company hadn't made any money

25

selling any goods at that time, correct?

See

I mean that

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A.

That's correct.

Q.

Now, if you even look further down the road -- this is

C(11), April 23rd, the prosecutor showed you -- I'm just trying

to show this to give it context -- now, we're in April.

so that the jury understands, C(4) was sent from Craig Toll to

Lynn Tabernacki January 28, 2010.

Just

Now, we're in April of 2010.

And if you take a look at the revenue page, which is

'3057, the revenue page on the financials, you see the

revenues, still unaudited pro forma, factories 40,000 -- 40 --

10

$40,000,000, see that?

11

A.

Yes.

12

Q.

And finished goods, zero.

13

A.

Yes.

14

Q.

So, OPIC would know -- well, Mr. Alford, Ms. Tabernacki

15

would know that by the end of the year in '09, the company

16

hasn't made a nickel selling panels, right?

17

A.

Yes.

18

Q.

And OPIC went -- you said that OPIC inevitably funded the

19

loan, correct?

20

A.

Yes.

21

Q.

They approved it, correct?

22

A.

Yes.

23

Q.

During the course of your negotiations, did you gather an

24

understanding from your negotiations with Mr. Alford and

25

Ms. Tabernacki that OPIC was under pressure to fund this loan

Right?

Excuse me.

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quickly?

A.

have mentioned that they were anxious to close the loan.

Q.

something down there at the time, correct?

A.

That was one of -- yes.

Q.

I mean they -- things moved along relatively quickly here

through the loan process prior to it being funded, correct?

A.

10
11

I believe I might have either -- probably Mr. Alford might

Because they wanted to get the money into Haiti and to do

Relatively speaking.
MR. SHARPSTEIN:

Excuse me, your Honor.

I'm just

looking for a particular page.


THE COURT:

12

Okay.

13

BY MR. SHARPSTEIN:

14

Q.

15

contract.

16

page 6 of the contract, but what is '1649 for the record here,

17

it's this litigation section.

18

The prosecutor showed you C(7), C(7), and that's the actual
And showed you a section on -- it's actually on

These are warranties, I think, acknowledgments from

19

the company that -- and you took a look at it -- that

20

litigation, "no action, suit, or other legal or arbitral

21

proceeding" -- that's arbitration, correct?

22

A.

That's correct.

23

Q.

-- "or investigation is pending."

24
25

So, let's stop here.

The prosecutor asked you -- this

is in the spring of 2010, and there was -- to the best of your


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
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knowledge, there was no litigation pending against the company

at that time when you were signing this agreement, isn't that

right?

A.

To my knowledge.

Q.

There was litigation later, isn't that right?

A.

It is my understanding that litigation arose subsequently.

Q.

But this requirement in the contract doesn't require no --

doesn't require the company to notify as to any litigation that

might come up in the future, does it?

10

A.

Unless the litigation's been threatened.

11

Q.

And actually the jury saw, but I don't think the prosecutor

12

asked you any questions about, you got involved in the time

13

period when there was a default -- a notice of default sent by

14

the OPIC against the company, correct?

15

A.

I believe I received a copy of that.

16

Q.

And you got involved in some discussions with OPIC at the

17

time, isn't that right?

18

A.

We had some discussions, yes.

19

Q.

Actually, you, Ms. Tabernacki, and maybe Mr. Toll sat down

20

and talked to them about lawsuits that had been filed in the

21

fall of 2010 against the company, isn't that right?

22

A.

I don't recall the details of that conversation.

23

Q.

This is January 5, 2011.

24

phone with Ms. Tabernacki?

25

Do you remember a meeting on the

If you don't....
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
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A.

I recall we had some conversations.

I don't recall the

dates.

Q.

fall of 2010, correct?

A.

That's my understanding.

Q.

Now, you told the jury about a discussion you had with OPIC

about postponing the unaudited financial requirements, correct?

A.

Yes.

Q.

You also had a negotiation with them as to how you would

But you do remember that those lawsuits were filed in the

10

define the project to be as it was known in the contract,

11

correct?

12

A.

Yes.

13

Q.

Because there was issues that arose in regard to the

14

difficulties in Haiti as to executing the project exactly as

15

the way it had been envisioned, correct?

16

A.

Yes.

17

Q.

There was a problem -- there were a lot of problems in

18

Haiti that happened after January that made it very -- well,

19

that affected this particular project, correct?

20

A.

21

notified the definition of the term "project."

22

Q.

23

it couldn't build homes right away because of land issues.

24

you become aware of that?

25

A.

I don't know about the problems in Haiti.

I know that we

You didn't go to Haiti, but there was some discussion about


Did

I understood there was some difficulty in obtaining a site


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
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for the factory.

Q.

had negotiated a lease for land to build a factory, but there

were issues there that had occurred, correct?

A.

build the factory.

Q.

redefining what the project was, correct?

A.

Yes.

10

Q.

Originally, it talked about they must build a factory and

11

build a certain amount of homes, correct?

12

A.

I would need to look at the precise language.

13

Q.

Well, more than what it was.

14

is, what inevitably was negotiated, what inevitably was in C(7)

15

on page 7 of the contract, '1680 Bate stamped, defining

16

"project."

And there couldn't -- it was very difficult to buy -- they

I was aware there was issues with obtaining a parcel to

So, you actually negotiated a -- with them specifically

17

Let's take a look at what it

Here, "project" means "the development,

18

construction, and operation of a manufacturing

19

facility to be owned and operated by the project

20

company, dedicated to the production of composite

21

structural panels to be used for rapid deployment,

22

energy efficient homes, and other structures in the

23

project company."

24
25

Do you remember that?


A.

Yes.
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Q.

So, there was discussion about how the company would be

involved in building other structures, not just the homes,

isn't that right?

A.

Yes.

Q.

I mean that was something that was very specifically

discussed with OPIC to their understanding and negotiated to

the extent that that section was changed from their original

vision of what OPIC -- of what InnoVida would do, correct?

A.

I would need to see the original language to tell you

10

exactly what was changed.

11

Q.

12

about, well, the -- for example -- and then I'll get to a

13

question -- it said in the definition of "financial statement"

14

that GAAP statements required, that financial statements made

15

in accordance with Generally Accepted Accounting Principles

16

were required.

17

GAAP statements.

Okay.

18

And the prosecutor asked you quite a few questions

And these that they got, OPIC got, were not

And then she asked you, that would violate some

19

form -- that would not comply with the contract, correct?

20

you remember those questions?

21

A.

Yes.

22

Q.

So, if, in fact, the other side gets something that they

23

don't think complies with the contract, they can refuse to lend

24

the money, correct?

25

A.

Yes.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

Do

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Q.

They can, through their lawyer -- it happens all the time,

doesn't it?

A.

Yes.

Q.

Well, not every single time, but a lot of times in

commercial transactions a lender, a bank, an equity company

says, hey, you didn't give us -- we're not satisfied with these

statements, we're not funding your loan, right?

A.

It does happen.

Q.

Did they do that here?

10

A.

No.

11

Q.

They, getting everything they had in front of them, as it

12

was, decided to fund the loan, right?

13

A.

Yes.

14

MR. SHARPSTEIN:

Excuse me for one second, your Honor.

15

(Discussion had off the record between counsel)

16

MR. SHARPSTEIN:

17

THE COURT:

18

MS. FOSTER-STEERS:

That's all I have, your Honor.

Redirect?

19

Yes, your Honor.

REDIRECT EXAMINATION

20

BY MS. FOSTER-STEERS:

21

Q.

22

audited financial statements that were to be submitted to OPIC.

23

Do you remember that question?

24

A.

Yes.

25

Q.

Okay.

Mr. Smith, Mr. Sharpstein asked you about the delayed

Can you tell the members of the jury why it was that
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
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the audited financial statements were gonna be delayed?

A.

I'm sorry, can you repeat the question?

Q.

Do you know why it was that the audited financial

statements were delayed?

A.

auditors and that the scope and time to require the audit would

require more time than OPIC originally requested.

Q.

remember that?

Mr. Toll told me that there was a delay in engaging the

So, the new date was gonna be August 31, 2010.

I don't remember it, but there was a new date.

Do you

10

A.

11

look at the loan agreement to see it.

12

Q.

13

process of being retained by InnoVida?

14

A.

15

don't recall now the name of the firm.

16

Q.

Okay.

17

A.

Yes.

18

Q.

Okay.

19

was --

20

A.

That sounds correct.

21

Q.

Now, do you know if Ernst & Young had been provided with

22

financial statements by InnoVida?

23

A.

I don't know.

24

Q.

Mr. Sharpstein also asked you, Mr. Smith, about the

25

litigation section of the loan agreement.

Okay.

I'd have to

Did he tell you who had been retained or was in the

I understood it was one of the major accounting firms.

Are you familiar with Ernst & Young?

Do you know whether or not that was the company that

I just want you to

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direct your attention to this particular section, sir --

Section 6.08, which says "notice of default and other matters."

Do you see that?

A.

Q.

Yes.
"The borrower shall notify OPIC immediately

of the commencement of any legal or arbitral

proceedings against the parent company that

involve claims that either individually or in the

aggregate at any given time exceed the equivalent

10

of $500,000."

11

Do you see that, sir?

12

A.

Yes.

13

Q.

Okay.

14

the fall of 2009, right?

You're aware of the litigation that was brought in

15

MS. SELMORE:

16

BY MS. FOSTER-STEERS:

17

Q.

2010, I'm sorry.

18

A.

Yes.

19

Q.

And in response to a question by Mr. Sharpstein, you were

20

sitting down with OPIC in January, 2011, to talk about that

21

litigation, correct?

22

A.

23

with OPIC.

24

Q.

25

notification of any pending litigation to OPIC in the fall of

Ten.

As I mentioned, I don't recall the exact dates that I spoke

Okay.

But did OPIC -- did InnoVida provide immediate

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


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SMITH - REDIRECT/FOSTER-STEERS
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2010?

A.

I don't know.
(Discussion had off the record)

3
4

BY MS. FOSTER-STEERS:

Q.

in terms of the notification of any pending litigation, were

you approached by anyone at InnoVida and told about this

pending litigation in the fall of 2010?

A.

No.

10

Q.

And with respect to the Ernst & Young retainer by InnoVida,

11

do you know whether or not any financial statements provided to

12

Ernst & Young were the same as those provided to OPIC through

13

you?

14

A.

I don't know.

15

Q.

Would you expect that there would be?

16

A.

I'm sorry?

17

Q.

Would you expect that there would be?

18

A.

Yes.

19

Q.

Okay.

Now, did you -- with respect to the OPIC matter, Mr. Smith,

20

MS. FOSTER-STEERS:

21

THE COURT:

22

MR. SHARPSTEIN:

23
24
25

No further questions, your Honor.

Thank you, sir.

You may --

Could I just ask one question based

on a question she asked, your Honor?


THE COURT:

You should have objected being beyond the

scope, but I'll allow it this one time.

I'll allow it this one

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


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46

time.

RECROSS-EXAMINATION

BY MR. SHARPSTEIN:

Q.

things have happened in your law practice in the last few years

that makes you forget or it's incapable to remember certain

things about these transactions, correct?

A.

Yes.

Q.

Do you remember you gave an interview to the -- in December

Mr. Smith, I assume that you're -- this is -- a lot of

10

of 2012, you gave an interview to the prosecutor and to the

11

FBI.

12

A.

Yes.

13

Q.

Remember during the course of that statement telling them

14

that in or around the fall of 2010, several lawsuits were filed

15

against Osorio and InnoVida, which alleged certain conduct,

16

that both Osorio and Toll told you that the lawsuits and the

17

allegations were filed and that their allegations were false?

18

Do you remember that?

Do you remember that?

19

MS. FOSTER-STEERS:

20

THE COURT:

Objection.

Hearsay, your Honor.

Overruled.

21

A.

I'm sorry, what was the question?

22

Q.

Do you remember telling the FBI and the prosecutor when you

23

were interviewed that in the fall of 2010, you were alerted to

24

the lawsuits by both Osorio and Toll, who told you they were

25

false?
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47

A.

I don't recall the precise order of which I heard about the

lawsuit.

MR. SHARPSTEIN:

THE COURT:

MS. FOSTER-STEERS:

THE COURT:

That's all I have.

Anything further, Ms. Foster-Steers?


No, your Honor.

Thank you, sir.

You may step down.

You're excused.

THE WITNESS:

(Witness excused)

10

THE COURT:

Thank you.

All right, members of the jury, we're

11

going to take a 15-minute recess.

Remember my admonition not

12

to discuss the case or allow it to be discussed in your

13

presence.

14

15 minutes.

We'll see you back in the jury room in about

15

COURTROOM SECURITY OFFICER:

16

(The jury exited the courtroom)

17

THE COURT:

18

Please rise for the jury.

And if there's nothing else to come before

the Court, we'll be in recess for 15 minutes.

19

(The Judge exited the courtroom)

20

(Recess taken at 10:47 a.m. until 11:10 a.m.)

21

(The Judge entered the courtroom)

22

THE COURT:

23

Counsel is present.

24

Anything to come before the Court before we bring the

25

Be seated.
Mr. Toll's present.

jury in?
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
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48

MS. FOSTER-STEERS:

THE COURT:

MR. SHARPSTEIN:

THE COURT:

(The jury entered the courtroom)

THE COURT:

No, your Honor.

Ready, Mr. Sharpstein?


Yes, your Honor.

All right.

Let's bring in the jury.

Counsel concede the presence of the jury

and waive its polling?

MR. SHARPSTEIN:

MS. FOSTER-STEERS:

10

THE COURT:

Yes, your Honor.


Yes, your Honor.

And did everyone follow my admonition not

11

to discuss the case or allow it to be discussed in your

12

presence?

13

All right.

14

MS. FOSTER-STEERS:

15

The government may call its next witness.


The United States calls Mark

Hobson.

16

THE COURT REPORTER:

Please raise your right hand.

17

(MARK HOBSON, GOVERNMENT'S WITNESS, WAS SWORN)

18

THE COURT REPORTER:

Please have a seat.

Please get

19

right in front of the microphone, state your full name for the

20

record, spelling your last name.


THE WITNESS:

21
22

Mark Hobson, H-O-B-S-O-N.


DIRECT EXAMINATION

23

BY MS. FOSTER-STEERS:

24

Q.

Mr. Hobson, are you employed?

25

A.

Yes, I am.
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1

Q.

Where do you work, sir?

A.

I work at a firm, Devine, Goodman, Rasco,

Watts-Fitzgerald & Goodman (sic).

Q.

And what is your occupation, Mr. Hobson?

A.

I'm a business lawyer.

Q.

How long have you been a lawyer?

A.

I was admitted to the bar in '94.

Q.

1994?

What law school did you go to?

10

A.

I went to Florida State University.

11

Q.

Now, after leaving law school, where did you work?

12

A.

After, I went to Belgium, got a master's of law in

13

international law.

14

in D.C. for the ABA.

15

Florida bar, worked for a friend for a few months, and then I

16

went to Brazil for almost five years.

17

Q.

Okay.

18

A.

And I came back, and I worked for Shutts & Bowen for almost

19

12 years.

20

Q.

Okay.

21

A.

I believe it was October, 1999.

22

Q.

Did you work in a particular division?

23

A.

I was in the corporate department.

24

Q.

What did you do, sir?

25

A.

I did various, you know, business, legal matters, start-up

And I came back, I did some pro bono work


And I came back to Florida, took the

And when you came back, did you work?

When did you begin working at Shutts & Bowen?

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companies to filings with the SEC.

secured lending matters.

Q.

Security-related matters?

A.

Secured lending matters.

Q.

Secured lending matters.

And I also did a lot of

If you could just speak up a little bit --

A.

Sure.

Q.

-- because your voice trails off at the end of your

responses.

10

Mr. Hobson, did you work with an individual by the

11

name of Alfred Smith?

12

A.

Yes.

13

Q.

All right.

14

work on a legal matter involving a company by the name of

15

InnoVida?

16

A.

Yes.

17

Q.

Can you tell the members of the jury how it is that you

18

came to work on that particular matter?

19

A.

20

in March of that year, 2010 --

21

Q.

Yes.

22

A.

-- and then in August of 2010.

23

much got called in when Al went on vacation.

24

Q.

25

March, 2010?

He was one of my bosses.


And in August, 2010, did you have occasion to

Well, I actually worked on it in two separate occasions --

And both times I pretty

What did you do with respect to the InnoVida matter in

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


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A.

I helped prepare some of the underlying loan documentation

and helped organize some entities and get their registered

agents.

Q.

Okay.

A.

The only person I really worked with would have been Craig

Toll.

Q.

on the matter involving InnoVida?

A.

Did you work with anyone at InnoVida?

And did you work with him in March, 2010, when you worked

I don't recall specifically.

I may have corresponded via

10

e-mail a couple times.

11

Q.

12

on the same matter -- or, rather, a matter related to InnoVida,

13

correct?

14

A.

Correct.

15

Q.

And what was that matter, sir?

16

A.

That was in connection with a loan from OPIC.

17

Q.

What did you have to do?

18

A.

I recall that I helped prepare some documentation for a

19

second withdraw under the loan agreement.

20

Q.

Second disbursement?

21

A.

Yes.

22

Q.

Okay.

23

doing what you had to do in August, 2010?

24

A.

25

there's also a conference call one time with the OPIC people

Okay.

Now, when it came to August, 2010, you again worked

Did you work or -- work with anyone from InnoVida in

Well, I corresponded with Craig, and I believe we --

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and Craig and Claudio Osorio.

Q.

ahead or go forward with that second disbursement?

A.

things had to be submitted to show that they were at that

stage.

Q.

Okay.

A.

I believe it was a form of -- of an affidavit of sorts that

simply had disbursement requests.

Okay.

Yes.

Okay.

Now, did you have to gather documents in order to go

I recall to get the second disbursement certain

Do you recall what those things were?

I forget the exact title.

10

Q.

Did you -- or, rather, who did you obtain the

11

information from?

12

A.

13

with Craig Toll.

14

Q.

Had you ever met Mr. Toll in person?

15

A.

I'm not sure that I did.

16

was I believe the CFO with CHS Electronics.

17

him on a couple occasions back in 1999, 2000, but I didn't meet

18

him in 2010 --

19

Q.

Okay.

20

A.

-- personally.

21

Q.

Okay.

22

A.

It was primarily by e-mail.

23

the phone a couple times.

24

Q.

25

was that information provided, Mr. Hobson?

Well, Al Smith was on vacation, so I was working mostly

Okay.

When I started Shutts & Bowen, he


So, I dealt with

So, how did you communicate with Mr. Toll?


And I think I spoke to him on

Now, when you requested information from Mr. Toll,

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A.

I believe it was, yes.

Q.

I'm gonna show you what has been admitted into evidence as

Government's Exhibit C(18) and ask you whether or not you

recognize these documents?

5
6

MS. FOSTER-STEERS:
your Honor?

THE COURT:

(Pause)

And may I approach the witness,

All right.

BY MS. FOSTER-STEERS:

10

Q.

Are you familiar with those documents, Mr. Hobson?

11

A.

Yes, I'm familiar with the e-mail I sent to Cameron Alford

12

with OPIC.

13

Q.

Okay.

14

A.

He is the in-house lawyer -- one of the in-house lawyers

15

with OPIC.

16

Q.

17

Mr. Alford from OPIC?

18

A.

No.

19

Q.

C(18), Bate Number ending '0402, this is an e-mail from you

20

to Cameron Alford.

21

A.

I do.

22

Q.

Okay.

23

A.

Correct.

24

Q.

And below there is another e-mail from you sent Wednesday,

25

August 4th.

Okay.

Who was Cameron Alford?

Did you deal with any other lawyers besides

Do you see that?

And copied is Craig Toll and Alfred Smith, right?

Do you see that?

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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HOBSON - DIRECT/FOSTER-STEERS
1

A.

Yes, I do.

Q.

Okay.

A.

(No response)

Q.

Were these the documents attached to this particular

e-mail?

A.

(No response)

Q.

The list?

A.

Yes, I see the list.

Q.

Okay.

And then there's a list of items, right?

My question to you is, were these documents

10

attached -- the list that we see here, were those the

11

attachments to the e-mail, C(18)?

12

A.

That's my understanding, correct.

13

Q.

Okay.

14

A.

With the exception of, in my follow-up e-mail where I said

15

one of the attachments was a mistake.

16

my follow-up e-mail.

17

Q.

18

a financial statement from InnoVida?

19

A.

20

requirements.

21

Q.

22

from Craig Toll?

23

A.

I would have had to have.

24

Q.

Because did you get any information from anyone else at

25

InnoVida, Mr. Hobson?

Okay.

So, I corrected that in

Now, attached to your e-mail, Mr. Hobson, was there

I believe so.

All right.

I believe that was one of their

And did you obtain this financial statement

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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A.

Well, the only one I dealt with was Craig, and then we had

the one conference call with the OPIC, and that was when

Claudio was involved, as well.

Q.

Okay.

A.

But --

Q.

Did you get any documents from Claudio Osorio?

A.

No, not personally.

Q.

Okay.

progress report on the Haiti Project, correct?

Looking at Bate Number ending '0410, this is a

10

A.

Correct.

11

Q.

Okay.

12

A.

That is the date on this document.

13

Q.

Okay.

14

this?

15

A.

16

Project.

17

Q.

Okay.

18

A.

Yes.

19

Q.

And looking now at Bate Number ending '0430, this is an

20

invoice dated April 30, 2010, right?

21

A.

Correct.

22

Q.

And July 16, 2010, Bate Number ending '0431, right?

23

A.

Correct.

24

Q.

And another invoice dated August 3, 2010, Bate Number

25

ending '0432, right?

And the date on the report is August 4, 2010, right?

And looking now at Bate Number '000429, what is

It appears to be a bank reconciliation for the Haiti

Provided to you by Mr. Toll, right?


It would had to have been provided by him.

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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A.

Correct.

Q.

And then an e-mail at the top from Claudio Osorio -- well,

at the very, very top is the name "Craig Toll," right?

A.

At the very, very top left-hand corner, yes.

Q.

Yes.

And it says e-mail dated Wednesday, August 4, 2010,

from Claudio Osorio to Craig Toll, right?

A.

Correct.

Q.

And in the body of the e-mail, it has from "Lisa Gutierrez

10

Brito (emergency relief station head for WV)."

11

Do you know anything about this e-mail, Mr. Hobson?

12

A.

Not really the specifics.

13

Q.

Okay.

14

Mr. Toll again, correct?

15

A.

16

I did.

17

Q.

18

disbursement request, right?

19

A.

Yes.

20

Q.

Okay.

21

were they in support of the second disbursement request?

22

A.

Yes.

23

Q.

For $6.7 million, right?

24

A.

I believe so, yes.

25

Q.

Signed by Craig Toll, right?

But this is an e-mail that you obtained from

I honestly don't recall it, but it (sic) very possible that

Okay.

And then this is the August 2, 2010, second

And the documents that we have looked at, they --

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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A.

It -- it appears to be his signature.

Q.

Who did you provide these documents to, Mr. Hobson?

A.

The documents I provided to OPIC.

her last name Ziegler?

Q.

Tabernacki, is that --

A.

Tabernacki.

7
8
9
10
11
12
13

And, also, Cameron Alford.

MS. FOSTER-STEERS:

THE COURT:

Cross-examination.

MR. SHARPSTEIN:

I have no questions of the witness,

your Honor.
THE COURT:

Thank you, sir.

15

(Witness excused)

16

THE COURT:

17

MS. SELMORE:

20
21
22
23
24
25

You may step down.

You're excused.
THE WITNESS:

19

I have no further questions, your

Honor.

14

18

I believe Lynn -- was

Thank you.

The government may call its next witness.


Your Honor, the United States will call

Gabby Fudally.
THE COURT REPORTER:

Please raise your right hand to

be sworn.
(GABRIELA FUDALLY, GOVERNMENT'S WITNESS, WAS SWORN)
THE COURT REPORTER:

Please sit down.

Please state

your full name for the record, spelling your last name.
THE WITNESS:

Gabriela Fudally, F, as in "Frank," U-D,

as in "David," A-L-L-Y.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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58

THE COURT REPORTER:

THE WITNESS:

First name?

Gabriela, G-A-B-R-I-E-L-A.
DIRECT EXAMINATION

3
4

BY MS. SELMORE:

Q.

Good morning, Ms. Fudally.

A.

Good morning.

Q.

Are you employed, ma'am?

A.

Yes.

Q.

How are you employed?

10

A.

By Wells Fargo.

11

Q.

And what do you do for Wells Fargo?

12

A.

I am a market support consultant.

13

Q.

And what does a market support consultant do?

14

A.

We are -- I am in charge of 14 stores in Broward County,

15

and we make sure that they are operationally sound, they comply

16

with policies and procedures, we -- a support service, and we

17

mitigate all losses and risks for the branch.

18

Q.

And how long have you been performing that function?

19

A.

This is my 27th year with Wells Fargo.

20

Q.

Now, at some point in time did you work for Wachovia?

21

A.

I did.

22

Q.

When did you stop working for Wachovia?

23

A.

July of 2011 is when we converted, so....

24

Q.

And when you say "we converted," what do you mean?

25

A.

Wachovia converted to -- well, Wells Fargo bought Wachovia.


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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Q.

So, Wells Fargo took you on as their employee.

A.

Absolutely, yes.

Q.

Now, during that 27 years of working with Wachovia, are you

familiar with what their bank statements look like?

A.

Yes.

Q.

Ms. Fudally, I'd like to show you a document that has

previously been introduced as Government's Exhibit C(9).

A.

Okay.

Q.

Based on your experience, too, in working with Wachovia,

10

does that appear to be a Wachovia Bank statement?

11

A.

Yes, it does.

12

Q.

And I also show you a document that has been introduced

13

into evidence, Government's Exhibit C(42).

14

A.

Yes, I do.

15

Q.

Does that appear to be a Wachovia Bank statement?

16

A.

Yes, it does.

17

Q.

Now, I've highlighted a line here for August 11, 2011, and

18

it says "funds transfer advice," and there's a number.

19

see that?

20

A.

Yes, I do.

21

Q.

What does that line mean?

22

A.

That is an incoming wire transfer with an advice number.

23

That's a transaction number.

24

Q.

And if you could, speak directly into the microphone.

25

A.

Sorry.

Do you see that?

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

Do you

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Q.

identification purposes?

A.

Yes, it was.

Q.

And different wires, are they assigned different numbers?

A.

Yes.

assigned.

Q.

introduced as Government's Exhibit C(20).

document?

10

A.

That number, is it used -- or was it used in Wachovia for

I'd also like to show you a document that has been


Do you see that

Yes.

11
12

There -- that advice number is systematically

Thank you.
Q.

Now -- I'm sorry, it got too big.

13

Now, Ms. Fudally, this appears to be a -- what we

14

commonly call a "screen shot."

Are you familiar with that

15

term?

16

A.

Yes.

17

Q.

And what do I mean by "screen shot"?

18

A.

That is, if you have a computer screen, somebody hit the

19

"print" button, and it prints whatever is on your computer

20

screen.

21

Q.

Is this a bank statement like we've looked at previously?

22

A.

No, it's not.

23

Q.

Now, on this particular screen shot, what is the account

24

number for this particular account?

25

A.

'8744.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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Q.

And what is the date of the transaction purportedly

reflected there?

A.

It looks like August-11-2010 (sic).

Q.

And next to that, we see that terminology, "funds transfer

advice," and a number.

A.

Yes, I do.

Q.

And, again, what is that terminology?

represent?

A.

That is an incoming wire transfer with the advice number.

10

Q.

And what is the number that is reflected there?

11

A.

That's 2010081100051248.

12

Q.

And what is the amount of the wire transport -- transfer

13

reflected on this document?

14

A.

$2.5 million.

15

Q.

Now, Mrs. Podalski (sic), I'd like to direct your attention

16

back to -- Fudally, I apologize -- direct your attention back

17

to a bank statement.

18

statement?

19

A.

7-31-2010 through 8-31-2010.

20

Q.

And, again, what is the account number?

21

A.

You're gonna have to make that bigger, but it's two,

22

followed by four zeros, 21398744.

23

Q.

Now, what is the date?

24

A.

August 11th.

25

Q.

And how much is the wire indicated on this particular

Do you see that?

What does it

And for what period is this bank

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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statement?

A.

That is 500,000.

Q.

Now, does the wire transfer screen shot contain the same

advice number as indicated on the statement I introduced as

Government's C(42)?

A.

Yes.

Q.

Would you like to see them up close?

A.

Yes.

I saw that one.


Yes, it does.

10

Q.

And is it possible for two wires for different amounts to

11

have the same wire transfer advice number?

12

A.

No, it's not.

13

Q.

At our direction, did you conduct an investigation within

14

your system of records to determine the correct amount for the

15

wire transfer advice number 2010081100051248?

16

A.

Yes.

17

Q.

And what was the true amount of that wire?

18

A.

It's the ones on our official bank records, which is the

19

500,000.

20

Q.

And that would be the amount of $500,000?

21

A.

Um-hum, yes.

22

Q.

Based on what you discovered in your records as to the true

23

amount of the funds transfer advice wire ending in '1248, does

24

this document -- is it true?

25

A.

No.

I -- I mean I can't even testify to the -- this


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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document, because it's not our official bank records.

That is

something somebody would see on a personal account on their

personal online screen.

Q.

Well, was the wire ending in '1248 for $2.5 million?

A.

According to this document, but not -- that's not our

official bank records.

Q.

advice number in the amount of $2.5 million.

A.

So, Wachovia did not receive a wire with that transfer

No.

10

MS. SELMORE:

That's all I have, your Honor.

11

THE COURT:

12

(Discussion had off the record between counsel)

13

MR. SHARPSTEIN:

Cross-examination.

Excuse me, your Honor.

I just need

14

to get something here.

15

K(1).

16

(Discussion had off the record between counsel)

17

MS. SELMORE:

18
19
20

of documents.

Mr. Sharpstein, we've got several boxes

Do you want a specific document?

MR. SHARPSTEIN:

K(1)(j), K(1)(j), it's labeled

separately.

21

Excuse me.

22

(Discussion had off the record between counsel)

23

MS. SELMORE:

24
25

introduce K(1)(j).
MS. HA:

I apologize, your Honor.

No objection, your Honor.

We'd move to

Here.

That's not --

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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64

1
2

(Government's Exhibit Number K(1)(j) marked for


identification)

THE COURT:

MR. SHARPSTEIN:

We would move -- if the government is

moving it, then we'll just not object.


MS. SELMORE:

6
7

You're moving in K(1)(j), Ms. Selmore?

We can move it as a joint movement with

stipulation, no objection, your Honor.

THE COURT:

(Government's Exhibit K(1)(j) admitted into evidence)

10

K(1)(j) will be received.

CROSS-EXAMINATION

11

BY MR. SHARPSTEIN:

12

Q.

The -- good afternoon -- I'm sorry.

13

MR. SHARPSTEIN:

May it please the Court.

14

BY MR. SHARPSTEIN:

15

Q.

Good morning.

16

A.

Good morning.

17

Q.

What was your last name, I'm sorry?

18

A.

Fudally.

19

Q.

Ms. Fudally.

20

Now, as part of -- you're here as a custodian or as an

21

employee of Wachovia, former -- Wells Fargo, formerly Wachovia.

22

And you provided documents to the government, isn't that

23

correct?

24

A.

Yes.

25

Q.

You provided a number of documents to the jury -FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 65 of 185

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A.

Okay.

Q.

-- upon request, upon subpoena, correct?

A.

Yes.

Q.

And I'm gonna show you what's now in evidence as --

MR. SHARPSTEIN:

THE COURT:

BY MR. SHARPSTEIN:

Q.

May I approach, your Honor?

Yes.

-- K(1)(j).
(Discussion had off the record between counsel)

9
10

BY MR. SHARPSTEIN:

11

Q.

12

government, correct?

13

A.

14

them; our bank did.

15

Q.

16

Wachovia?

17

A.

18

see the documents.

19

documents.

20

Q.

Take a look through the documents.

21

A.

Oh, I'm sorry.

22

Q.

I believe what it's going to represent to you -- and I'll

23

cut to the quick --

24

A.

Okay.

25

Q.

-- is you provided a series of accounts that were owned and

Those are a series of bank records that you provided to the

Okay.

I mean the bank did.

I didn't personally provide

Well, do those appear to be official bank records of

I mean this -- yeah, they appear -- they're not -- I don't


I just see statements that these are the

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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operated by InnoVida, including the signature cards for the

accounts, the authorized signatures --

A.

Um-hum.

Q.

-- on the accounts, correct?

A.

It looks that way.

Um-hum.

Q.

your attention to things one at a time.

A.

Okay.

10

Q.

At the bottom, there are Bates Numbers, you see in the

11

bottom right-hand corner, stamped "GJW"?

12

numbers?

13

A.

Yes.

14

Q.

There's one GJWB, four zeros, 15.

15

of that one.

These are corporate resolutions.

The -- for example, why don't you -- I'm gonna -- I'll call

16

You see those

Why don't you grab hold

Now, so the jury understands, when someone opens an

17

account with the bank, there's a signature card that's placed

18

in the record that authorizes certain people to sign on the

19

account, correct?

20

A.

Correct.

21

Q.

That would be to make transactions such as checks, right?

22

A.

Yes.

23

Q.

Wire transfers, correct?

24

A.

Yes.

25

Q.

You would need someone who's authorized on the account to


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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make a wire transfer, correct?

A.

Yes.

Q.

So, you've shown the jury -- or I'm gonna just focus your

attention just briefly here to a page from C(9) that the

prosecutor sent -- showed you.

the screen.

This one you have to look on

This is an account number that ends in '44.

A.

Yes.

Q.

And that's where you looked at the wire transfer, and you

10

discussed certain things that she asked you.

11

Now, if you look at K(1)(j), that page that I referred

12

you to, does this appear to be the signature card for that '44

13

account number?

14

A.

Yes.

15

Q.

And if you look closely -- we'll zero in for the jury --

16

the authorized signators or depositors on this account are

17

Claudio Osorio, Amarilis Moran-Osorio, and Elba Gamboa.

18

see that?

19

A.

Yes, I do.

20

Q.

There's nobody else listed here on this account, correct?

21

A.

Correct.

22

Q.

So, one of those individuals would be authorized to make

23

that transfer you referred to, a wire -- would be authorized to

24

make a wire transfer on that '44 account, correct?

25

A.

Yes.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

Do you

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Q.

Take a look at -- there are several other accounts in

there, are there not?

it, you see there are several accounts --

A.

Um-hum.

Q.

-- for InnoVida under different company names, correct?

A.

Yes.

Q.

I'm gonna show you two pages of it, which are GJWB19 and

18.

but you have them there in front of you.

In K(1)(j)?

If you just pull those out.

10

If you just thumb through

I'll show them on the screen,

Here's an account that's -- let's zero back so the

11

jury understands.

12

1-7-2009, another InnoVida account, two numbers that end in '70

13

and '89.

14

Here's -- this is -- the date on this is

Do you see that?

15

A.

Yes.

16

Q.

And if you look down here, there are signators -- Claudio

17

Osorio, Craig Toll, Amarilis Osorio, and Elba Gamboa.

18

see that?

19

A.

Yes.

20

Q.

Now, turn to 18 that was right in front of it.

21

appears to be an updated signator depositor authorization on

22

those two accounts (indicating), dated 2-9-09.

23

that?

24

A.

Yes, I do.

25

Q.

And the people on the account are Claudio Osorio, Amarilis

Do you

This

Do you see

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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Osorio, Herb Margolis, and Elba Gamboa.

A.

Yes.

Q.

So that would replace the one right before it, correct?

A.

That's correct.

Q.

Because it has a date later in time.

A.

That's correct.

Q.

So, as of 2-9-09, these four people are the authorized

people on that account.

A.

That's correct.

10

Q.

If you turn -- if you could pull the documents from there

11

labeled 6 through 9.
MR. SHARPSTEIN:

12

Do you see that?

I'm putting it up for the jury's

13

benefit.

14

BY MR. SHARPSTEIN:

15

Q.

16

Southeast, LLC."

17

let's zero in so we can just see it -- it looks like May 20,

18

2010.

19

A.

Okay.

20

Q.

And the authorized signators on this account -- and it ends

21

in a '91 under "InnoVida Southeast" -- are Claudio Osorio,

22

Amarilis Osorio, Elba Gamboa, and a gentleman by the name of

23

Horacio Alvarez, correct?

24

A.

That's correct.

25

Q.

Those are the authorized signators on that account as of

Here we have another Wachovia account under "InnoVida


And here the date is -- on this, 06, is 5 --

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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May 20, 2010, correct?

A.

Yes.

Q.

Behind it, if you look, there are other cards from prior

dates, 2-9-09.

in the account.

2010, correct?

A.

Yes.

Q.

That's the latest one in there.

A.

Yes.

10

Q.

So, the one before it, which is 2-9-09, the same date that

11

we just looked at, the updated card on the '44, correct?

12

A.

Yes.

13

Q.

Has Claudio Osorio, Amarilis Osorio, Herb Margolis, and

14

Elba Gamboa.

15

A.

(No response)

16

Q.

Do you see that?

17

A.

Yes.

18

Q.

And there's one back here now, which is 12-9-08 (sic).

19

A.

12-20 (sic).

20

Q.

Which, if you look down, has -- it's the same account, the

21

'91, but it's a previous card where previously there was Herb

22

Margolis, Claudio Osorio, Amarilis Osorio, Elba Gamboa, and

23

Craig Toll.

24

A.

Yes.

25

Q.

But now go back to '07, Mr. Toll is taken off as of 2-9-09.

Now, these were -- these came before.

They're

But the one May 20th is the one as of May 20,

Do you see that?

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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Do you see that?

A.

Um-hum, yes, I do.

Q.

And definitely not on there on the latest one, 5-20-10,

correct?

A.

Correct.

Q.

That's Osorio, Osorio, Claudio and Amarilis, Elba Gamboa,

and Horacio Alvarez, correct?

A.

Yes.
MR. SHARPSTEIN:

9
10

THE COURT:

11

(Pause)

12

BY MR. SHARPSTEIN:

13

Q.

14

sorry.

Excuse me for a second.

All right.

Take a look at 16 through 21.


I apologize.

15

Actually, 17 through 21, I'm

Just 17 through 21.

Here's another account.

This one ends in '4270.

This

16

is InnoVida Services, Inc., also dated 5-20-10.

Do you see

17

that?

18

A.

Yes.

19

Q.

And we'll scan down to the signature card.

20

Osorio, Amarilis Osorio, Elba Gamboa, and Horacio Alvarez

21

again.

22

A.

Yes.

23

Q.

So, these are the authorized depositors, signators, the

24

people that are authorized to make transactions on that account

25

as of May 20, 2010, correct?

This is Claudio

Do you see that?

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


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A.

Correct.

Q.

And if you scan down to the prior cards, back in June --

this is 20, these are prior cards on that account, correct?

The one that -- I'm sorry -- '70, the one we were just looking

at.

A.

I'm sorry, which one were you referring to?

Q.

I'm referring to the account number -- it was the same

account number we just looked at on 17.

A.

Right, but which -- I'm sorry -- which exhibit are you

10

pointing to right now?

11

Q.

This is a prior card from back in '08, 6-3-08.

12

A.

Number 20, yes, that's correct.

13

Q.

Twenty.

14

A.

Yes.

15

Q.

And in '08, on that account, it was Claudio Osorio, Craig

16

Toll, and Elba Gamboa, correct?

17

A.

Yes.

18

Q.

But, again, 17, 5-20-10, Mr. Toll is not on that account,

19

correct?

20

A.

Correct.
MR. SHARPSTEIN:

21
22

Nineteen?

Excuse me, your Honor.

I apologize

to the jury.

23

(Discussion had off the record between counsel)

24

BY MR. SHARPSTEIN:

25

Q.

Just before -- I just have one or two more questions.


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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2

We looked at -- take out 14 and 15 out of your package


there.

We already looked at one of them.

I showed you before, this was '44, the InnoVida

Holdings account that that wire that you talked to the

prosecutor about came from, '44.

signator, which was Osorio, Amarilis Osorio, and Elba Gamboa.

And, again, we looked at the

There's an updated one on 3-10-2011.

And the account

is labeled "InnoVida Holdings," '44, the "Haiti Project

account."

10

A.

Correct.

11

Q.

Do you see that?

12

A.

Yes.

13

Q.

That was the Haiti Project account?

14

A.

Yes.

15

Q.

And there's a gentleman by the name of Mark Meland,

16

receiver.

17

A.

Yes.

18

Q.

Do you know who Mr. Meland is?

19

A.

Do I know him?

20

Q.

Or when the receiver took over this account, or anything

21

about that?

22

A.

23

3-10-2011, so I would imagine on that date.

24

Q.

25

"Haiti Project account," is the InnoVida Holdings, LLC '44 that

Do you see that?

No.

I don't know him personally.

Okay.

I mean the card was dated

But nevertheless, this '44, which was labeled the

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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we just talked about with the signature power of Osorio,

Osorio, and Gamboa, right?

A.

Don't -- Number 15, the one that's dated 11-9-2009, yes.

Q.

Yes.

And that's the account that those transfers came from,

the wire transfers the prosecutor asked you about, right?

A.

incoming wires, that was deposits.

Q.

Incoming into that account.

10

A.

Right.

11

Q.

Okay.

12

A.

Yes.

She was -- okay, just to be clear, she was asking me about

Not outgoing, deposits into that account.

13

MR. SHARPSTEIN:

14

THE COURT:

That's all I have, your Honor.

Redirect?
REDIRECT EXAMINATION

15
16

BY MS. SELMORE:

17

Q.

18

the signatory on the account, correct?

19

A.

That's correct.

20

Q.

And I'd like to ask you one additional question, as to

21

Government's Exhibit C(42), directing you back to that incoming

22

wire on 8-11-2010, if you go with me, on the third line down --

23

A.

Um-hum.

24

Q.

-- it says "ORG."

25

A.

That's the originator.

And, Ms. Fudally, for incoming wire, it's irrelevant who's

What does that mean?

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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Q.

And what is written there?

A.

Artie Rabin.

Q.

So, does that mean Artie Rabin sent $500,000 to the account

ending '8744 on August 11, 2010?

A.

Yes.

Q.

Thank you.

MS. SELMORE:

THE COURT:

No further questions, your Honor.

Thank you, ma'am.

You're excused.

10

THE WITNESS:

11

I can leave this here?

12

THE COURT:

13

(Witness excused)

14

THE COURT:

Thank you.

Yes.

All right, members of the jury, we're

15

going to go ahead and recess for lunch.

16

starting at one o'clock.

17

done by two.

18
19

You may step down.

I've got some hearings

I'm going to estimate they should be

So, I'm going to ask you to come back at two.

So, have a nice lunch.

We'll see you back at

two o'clock.

20

(The jury exited the courtroom)

21

THE COURT:

And if there's nothing else to come before

22

the Court, we'll be in recess until two o'clock on this case,

23

one o'clock on other matters.

24

(The Judge exited the courtroom)

25

(Luncheon recess taken at 12:00 p.m.)


- - - - FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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76

MONDAY, JULY 1, 2013, 2:03 P.M.

(The Judge entered the courtroom)

MR. SHARPSTEIN:

THE COURT:

Counsel are present.

Anything to come before the Court before we bring the

Your Honor.

All right.

Mr. Toll's present.

jury in?

MR. SHARPSTEIN:

MS. FOSTER-STEERS:

10

We're back on the record.

No, your Honor.


Not from the government, your

Honor.

11

MR. SHARPSTEIN:

12

THE COURT:

We got to wait for my court security

All right.

If we have all the jurors, let's bring in

13
14
15

No, your Honor.

officer.

the jury.

16

COURTROOM SECURITY OFFICER:

17

(The jury entered the courtroom)

18

THE COURT:

19

Please rise for the jury.

Counsel concede the presence of the jury

and waive its polling?

20

MS. FOSTER-STEERS:

21

MR. SHARPSTEIN:

22

THE COURT:

Yes, your Honor.

Yes, your Honor.

And did everyone follow my admonition not

23

to discuss the case or allow it to be discussed in your

24

presence?

25

A JUROR:

Yes.

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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THE COURT:

Ms. Foster-Steers, you may call your next witness.

MS. FOSTER-STEERS:

All right.

I think we're ready to resume.

Your Honor, at this time, the

government calls Cameron Alford.

(The witness entered the courtroom)

THE COURT REPORTER:

(CAMERON S. ALFORD, GOVERNMENT'S WITNESS, WAS SWORN)

8
9
10

THE COURT REPORTER:

Please sit down.

Please get in

front of the microphone, state your full name for the record,
spelling your last name.

11
12

Please raise your right hand.

THE WITNESS:

Cameron Scott Alford, last name

A-L-F-O-R-D.

13

DIRECT EXAMINATION

14

BY MS. FOSTER-STEERS:

15

Q.

16

Good afternoon, Mr. Alford.


Mr. Alford, are you employed?

17

A.

I am.

18

Q.

Where do you work, sir?

19

A.

I work at the Overseas Private Investment Corporation.

20

Q.

Is that referred to sometimes as OPIC?

21

A.

Correct.

22

Q.

Okay.

23

A.

Since August of 2007.

24

Q.

What do you do?

25

A.

I'm in the legal affairs department.

How long have you worked for OPIC?

I'm an assistant

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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general counsel working on our transactions.

Q.

Assistant general counsel?

A.

Correct.

Q.

Now, can you tell the members of the jury, what law school

did you graduate from?

A.

George Washington University.

Q.

When was that?

A.

2001.

Q.

And what did you do after law school?

10

A.

I worked for a law firm, a number of offices in

11

Washington, D.C., London, and New York.

12

Q.

13

really low.

14

A.

Sorry.

15

Q.

Okay?

Okay.

16

You're gonna have to speak up, because your voice is

So everybody has to hear.

Okay.

So, you worked for a law firm in

17

Washington, D.C.

Doing what?

18

A.

I was doing structured finance work.

19

Q.

And what is structured finance work?

20

A.

It's a little bit more complicated than just straight

21

lending.

22

enterprises to structure financial arrangements that would meet

23

their needs.

24

Q.

Okay.

25

A.

Until February of 2007.

So, I was working with large banks or corporate

How long did you work for that law firm?

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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Q.

February of 2007?

A.

Correct.

Q.

And did you leave that law firm to then go to OPIC?

A.

Yes.

and then went to OPIC after that.

Q.

I left the law firm, and then was looking for a job,

Okay.

All right.

Now, as assistant general counsel with OPIC, would you

tell the members of the jury what it is that you do.

A.

10

Sure.
So, I am -- as I said before, I work on our

11

transactions.

12

government.

13

around the world.

14

into project teams that have both a finance officer as well as

15

then someone from legal affairs.

16

I'm the legal affairs member of the project team.

17

Q.

18

project team that you work in?

19

A.

20

Okay.

So, we are an agency of the United States

And we do promotion of financing and development


And for those transactions, we are organized

So, for those transactions,

What do you do as a -- what do you do in that

Sure.
So, I do things in the beginning of a transaction,

21

such as helping with due diligence, where we're investigating a

22

project and thinking whether or not it's something that OPIC

23

wants to pursue.

24

negotiation, documentation with the other side, and then

25

implementing the project through its life cycle, so whether

Also, then, if we do progress, get into the

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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that's waivers or amendments or whatever the case may be.

Q.

of a company called InnoVida.

A.

I am.

Q.

How is it that you're familiar with the name InnoVida?

A.

So, I was a member of a project team where we were looking

to finance a project sponsored by InnoVida, and then worked on

that project over the course of 2009 through 2011.

Q.

Okay.

Okay.

Now, I wanted to direct your attention to the name


Are you familiar with that name?

When -- so -- did you begin working on the project

10

in 2009?

11

A.

So, I was assigned to the project in December of 2009.

12

Q.

Okay.

13

particular project?

14

A.

15

side.

16

finance side will request from legal affairs an attorney be

17

assigned to the project.

18

work on a volunteer basis.

19

And how is it that you came to be assigned to that

So, projects typically come into OPIC through the finance


And then once a project is sufficiently far along, the

And then within legal affairs, we

So, this project was put out for bid, and I

20

volunteered to do it.

21

and particularly the development angle in Haiti, a place I

22

hadn't worked before, and wanted to do that.

23

Q.

24

project team?

25

A.

Okay.

It seemed like an interesting project,

Now, who were you assigned to work with in that

Lynn Tabernacki.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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Q.

And Ms. Tabernacki's position at OPIC was what?

A.

I confess I don't know her exact title, but she's in the

small/medium enterprise finance department.

Q.

Okay.

A.

Correct.

Q.

All right.

2009, what was the project that you were assigned to work with

for InnoVida?

A.

So, both of you worked on the project.

Would you tell the members of the jury, in

So, the project as presented to us was for the construction

10

of a factory in Haiti, which would manufacture composite panels

11

that then could be used for the manufacture of housing,

12

low-income housing in Haiti.

13

Q.

14

business?

15

A.

I'm sorry, could you repeat the question?

16

Q.

What was your understanding of what InnoVida's business

17

was?

18

A.

19

then could be used for the construction of anything from

20

low-income housing to office buildings.

21

Q.

22

the country of Haiti?

23

A.

Correct.

24

Q.

Now, when you first began working on that project,

25

Mr. Alford, tell the members of the jury what you did.

Okay.

And what was your understanding of InnoVida's

InnoVida's business was to make these composite panels that

And the project that you were assigned to work on involved

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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A.

So, we had started the diligence phase of the project.

So,

looking at the information that had been submitted to us, Lynn

was undertaking on the credit underwriting side, seeing whether

or not it was a worthwhile credit to finance.

to do work on the legal side, trying to understand their

business and how they operate, how they're organized, the

relationship with joint ventures, and just the overall

structure of the company.

Q.

I was beginning

Now, are you aware, sir, that in January, 2010, there was

10

an earthquake in Haiti?

11

A.

Of course.

12

Q.

And what, if anything, did you do with respect to that

13

project that you had been working on for InnoVida -- involving

14

InnoVida, rather?

15

A.

16

Sure.
So, the housing need in Haiti was great before the

17

earthquake, which, again, was one of the reasons I was

18

interested in doing the project.

19

had wanted to move very quickly to try and get this project up

20

and running, because it would help fill this critical need,

21

again, critical pre-earthquake and certainly critical

22

post-earthquake.

23

Q.

24

loan move forward?

25

A.

So, what happened then?

But then post-earthquake, we

After the earthquake, how did the

Sure.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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So, we had done a site visit to InnoVida's factory

here in south Florida.

Q.

When you say "we," who are you talking about?

A.

Lynn and myself, Lynn Tabernacki.

Q.

Did you travel to Miami?

A.

We did.

Q.

Did you meet with anyone?

A.

We did.

InnoVida, met with Mr. Toll, the CFO, were introduced to others

We met with Mr. Osorio, the president and CEO of

10

in the office who I don't recall their names, but had toured

11

that and the factory site.

12

Q.

Do you see Mr. Toll in the courtroom today?

13

A.

I do.

14

Q.

Can you point him out and identify something that he's

15

wearing?

16

A.

He's wearing a blue suit and a maroon tie (indicating).

17

Q.

How long was your visit when you came down to Miami?

18

A.

I believe it was for just the day.

19

Q.

And what did you visit?

20

A.

The actual factory site.

21

Q.

What did you see?

22

A.

So, the front of the building is where the general offices

23

were, as well as a conference room, where we had spent most of

24

the day.

25

floor, where they had a number of tables that manufacture these

Tell us.

The back of the building was the actual factory

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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composite panels.

Q.

Okay.

A.

Yes.

Q.

By whom, do you remember?

A.

Mr. Osorio and Mr. Toll.

Q.

Now, after that visit to Miami in January, 2010, how did

you come away feeling from that meeting?

A.

out whether the company that has approached you for a project

10

is a real entity in doing what they say that they're doing and

11

what they can do.

12

Miami, having seen their offices, having seen the actual

13

production of panels, was that InnoVida was a company that was

14

doing what they said they could do.

15

Q.

16

fact, can you tell the members of the jury, how soon after the

17

earthquake was your visit to Miami?

18

A.

19

within a week.

20

Q.

21

What happened?

22

A.

23

then to move the project through our process, at that point,

24

which would include our credit underwriting process as well as

25

our policy process.

Were you given a tour?

I -- one of the purposes of diligence is to try and figure

And so, my initial feeling coming back from

Now, after your visit in Miami, in January, 2010 -- in

I don't recall.

Do you remember?

It was -- number of days, may have been

I don't recall.

So, after your visit to Miami, Mr. Alford, what did you do?

So, Lynn and I went back to Washington, and we continued

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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And once we obtained approval for that, then executed

what we referred to as a commitment letter, which sets out the

basic parameters of a financing transaction.

Q.

and then the policy process.

A.

Correct.

Q.

Can you tell the members of the jury, what's involved in

the credit underwriting process?

A.

10

You said you had a credit underwriting policy -- process,

Sure.
So, credit underwriting process is trying to determine

11

whether the entity that you're financing is worthwhile, that

12

they would be good for the loan, if you will, not dissimilar to

13

a bank underwriting me for a credit card or a home loan or

14

anything like that.

15

Q.

So, what do you look at in making that evaluation?

16

A.

Sure.

17

So, we're looking at the entities themselves, their

18

operating history, their size in terms of assets, looking at

19

their revenues, looking at the overall financial condition of

20

the proposed borrower.

21

Q.

Were you involved in that?

22

A.

I'm involved as a member of the project team and certainly

23

involved in the formulation of the credit paper and the

24

approval process.

25

made by Lynn on the finance side.

But the actual underwriting decisions are

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


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Q.

Now, what documents would you review in evaluating a

company, or in this case, InnoVida, as a potential borrower

from OPIC?

A.

again, going to structure, as I was saying before, trying to

get an understanding of the company and how it's organized, who

owns what, certainly the financial condition of the company, so

we can be looking at the financial statements, their operating

history.

Well, I think we would evaluate a number of things, right,

10

Q.

Mr. Alford, I'm gonna show you what has been introduced

11

into evidence as Government's Exhibit C(4).

12

with this e-mail?

13

A.

(No response)

14

Q.

Well, let me strike the question and direct your attention,

15

Mr. Alford.

16

that?

17

A.

I do.

18

Q.

And it's from Craig Toll to Lynn Tabernacki, right?

19

A.

Correct.

20

Q.

And attached to the e-mail are several documents.

21

see that?

22

A.

Yes.

23

Q.

Were these documents, Mr. Alford, used in evaluating

24

InnoVida as a potential borrower of OPIC's money?

25

A.

Are you familiar

The e-mail is dated January 28, 2010.

Do you see

Yes.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

Do you

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Q.

Would you tell the members of the jury, how so?

A.

Well, so this sets out the -- one aspect of the financial

condition of the company, so showing its assets and liabilities

and seeing that there's a significant amount of cash and cash

equivalents for assets, for example.

Q.

Okay.

A.

Financial statements and financial condition of a company

is massively important to OPIC in how we analyze any entity.

Q.

Why is it massively important to OPIC?

10

A.

It -- because it's -- it's a linchpin upon which we make a

11

decision whether or not to lend to the entity, or the

12

conditions under which we'd lend.

13

give an unsecured loan.

14

financially healthy, it would be a secured loan.

15

would the loan be?

16

only secured for 50 percent?

17

I say it's massively important.

18

Q.

19

exhibit, C(4), Bate Number ending '3029, the figures

20

represented here, what was the -- what were those figures

21

represented as?

22

A.

23

condition --

24
25

Okay.

How important is this document?

So, whether or not we would

Or if the company wasn't as


How secured

Would it be fully secured, over secured,


It would depend.

So, that's why

Now, with respect to -- and let's focus on this

So, these figures were represented as the financial

MR. SHARPSTEIN:

Objection to the form of the

question, would call for hearsay, I believe.


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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2

THE COURT:

He can testify to what his interpretation

of it was.

Overruled.

BY MS. FOSTER-STEERS:

Q.

Go ahead, sir.

A.

Could you please ask the question again?

Q.

Sure.

Looking at this particular page, Bate Number ending

'3029, what were these -- or was this document in particular

10

represented to be?

11

A.

12

of InnoVida Holdings.

13

Q.

Okay.

14

A.

As of two periods.

15

and then showing a comparison to the period ending December 31,

16

2008.

17

Q.

18

figures represented true and accurate and complete figures

19

related to InnoVida?

So, this document is representing the financial condition

As of period ending September 30, 2009,

And was it your understanding, Mr. Alford, that these

20
21

As of what date?

MR. SHARPSTEIN:

Objection to the form of the

question.

22

THE COURT:

Overruled.

23

A.

Yes.

24

Q.

Had they not been complete, what would happen?

25

A.

We would have sought for complete financial statements.


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Q.

And in this particular circumstances (sic), was this the

only document -- or, rather, was this document submitted on

January 28, 2010, the document submitted to OPIC as true and

correct figures of InnoVida?

A.

Can you restate the question, please?

Q.

I'll go on to the next page.

A.

Okay.

Q.

Which is gonna be Bate Number 0003031 from the same

exhibit, C(4).

Sorry.

And looking here, this is the combined

10

statement of operations.

Do you see that?

11

A.

I do.

12

Q.

And at the bottom, Mr. Alford, is net income, right?

13

A.

Correct.

14

Q.

And there's a figure of $9,574,152 for the period ending

15

September 30, 2009, right?

16

A.

Correct.

17

Q.

What was your understanding of what this particular figure

18

represented?

19

A.

20

earned for the year ending September 30, 2009.

21

Q.

22

December 31, 2008, the figure of $6,615,640, what was your

23

understanding of that particular number?

24

A.

25

date.

So, this figure represented the profit that InnoVida had

And for the period ending September -- I'm sorry --

Again, that that's the profit of InnoVida as of that end

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Q.

That particular date, right (indicating)?

A.

Correct.

Q.

Now, you did, in fact, move forward with a loan with

InnoVida, correct?

A.

Yes.

Q.

Do you recall the date of the loan -- the loan agreement,

rather?

A.

recall the specific date.

I do not.

I believe it was March of 2010, but I don't

10

Q.

I'm gonna show you what has been introduced as Government's

11

Exhibit 7A.

12

Holdings, LLC, InnoVida Innorez, Limited, and Overseas Private

13

Investment Corporation."

14

entered into between OPIC and InnoVida?

15

A.

Yes.

16

Q.

Now, can you tell the members of the jury, who did you work

17

with in coming to this final loan agreement?

18

with?

19

A.

20

negotiation between our side and the other side, InnoVida in

21

this case.

22

against their attorneys at Shutts & Bowen.

23

have collective conversations that would include the business

24

people, because certainly on the legal side, we don't decide

25

the business points.

It has "loan agreement between InnoVida

Is this the loan agreement that was

Who did you work

So, the loan agreement, like any loan agreement, a

So, on the legal side, I would often negotiate


Sometimes we would

That's up to Lynn and then the business

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folks at InnoVida.

Q.

Who in Shutts & Bowen did you work with?

A.

Alfred Smith.

Q.

Now, Mr. Alford, just directing your attention to Bate

Number ending '1648 of Exhibit 7A, it talks about financial

condition.

A.

I do.

Q.

Then it references:

Do you see that?

"The parent company's unaudited financial

10

statements, dated September 30, 2009, which have been

11

furnished to OPIC, and any other financial statements

12

that have been furnished to OPIC pursuant to

13

Section 6.06, are complete and correct and fairly

14

present its financial condition and results of its

15

operations for the period then ended."

16

What does that section, Mr. Alford, mean?

17

A.

So, what we're asking is, in this case, InnoVida Holdings

18

to represent that the financial statements they've shown us --

19

the document that was previously up -- is completely and

20

accurately reflecting the financial condition of the company.

21

Q.

22

Was it important to OPIC to see InnoVida's financial condition

23

as of September 30, 2009?

24

A.

Yes.

25

Q.

Okay.

Why is it important to see InnoVida's -- or let me ask you.

Why so?

Why was it important?

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A.

understanding the financial condition of the company is

extremely important to OPIC to know what it is that we're

financing and the health of the company that we're financing to

help ensure repayment.

Q.

you about the three words, "unaudited pro forma," that we see

at the top of the page.

A.

I do.

10

Q.

Do those words mean anything to you?

11

A.

Mostly that they're the unaudited financial statements of

12

the company.

13

Q.

Okay.

14

A.

Which I -- most entities prepare, unaudited financial

15

statements.

16

Q.

17

financial statements," what are you talking about?

18

A.

19

Well, as -- as I think I stated before, the --

Now, I want to take you back to Exhibit C(4).

And just ask

Do you see that?

And when you say "most companies prepare unaudited

Sure.
So, management of an entity would prepare financial

20

statements to show the financial health of a company on an

21

ongoing basis.

22

not checked by an external party.

23

right, companies then are audited by external auditors, who

24

look at those financial statements, as well.

25

Q.

Right?

Those are unaudited, meaning they're


And then on an annual basis,

Now, with respect to an unaudited financial statement, is


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it your understanding that an unaudited financial statement

should contain accurate information?

A.

Yes.

Q.

Why so?

A.

Why would it otherwise?

Q.

Is it something -- unaudited financial statement, are those

statements used by OPIC?

A.

Absolutely.

Q.

Are they relied upon by OPIC?

10

A.

Absolutely.

11

Q.

Now, the two words "pro forma" here, did those two words

12

mean anything to you?

13

A.

Meaning in the form of.

14

Q.

And when you say "in the form of," did -- back in 2010, did

15

those words mean anything to you?

16

A.

Not that I recall, no.

17

Q.

Okay.

18

Smith?

19

A.

Not that I recall, no.

20

Q.

Did you believe, sir, that the financial statements

21

provided to you back in 2010 -- and, in particular,

22

Exhibit C(4) -- did you believe that those particular financial

23

statements met the requirements of the loan agreement?

24

A.

Yes.

25

Q.

Okay.

Were those two words ever discussed with Alfred

Why did you think that?


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A.

Those were what were furnished to us, and based on the

representation that we looked at before, that the company was

certifying that those financial statements were --

4
5

MR. SHARPSTEIN:

Objection.

Objection.

Move to

strike.
THE COURT:

Overruled.

BY MS. FOSTER-STEERS:

Q.

Go ahead, sir.

A.

That those financial statements were a complete, fair, and

10

accurate -- I don't remember the specific wording -- reflection

11

of the financial condition of the company.

12

Q.

13

were not the only financial statements that OPIC received from

14

InnoVida, right?

15

A.

Correct.

16

Q.

In fact, your loan agreement calls for, in

17

Section 6.06(a)(1):

Now, the financial statements that we see in Exhibit C(4)

18

"Within 90 days after the end of each fiscal

19

quarter (other than the fourth fiscal quarter) of each

20

fiscal year, unaudited consolidated financial

21

statements for the parent company and a comparison

22

between such financial statements and the budget for

23

such fiscal quarter furnished pursuant to 6.06, all

24

certified by the chief financial officer of the parent

25

company as being complete and correct, together with


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such officer's certificate."

Would you tell the members of the jury what that

particular section of the loan agreement meant?

A.

Sure.

So, that means that every quarter, so within -- we'll

say in this case at the end of March, right, within 90 days of

that, the parent company needs to submit to us a copy of their

consolidated financial statements, again unaudited, but

prepared internally by management, and that that's certified by

10

the CFO as being complete and correct.

11

Q.

12

the financial statements being provided to you were, in fact,

13

complete and correct?

14

A.

15

this section.

16

Q.

17

'0750.

18

A.

Yes.

19

Q.

And here, it reads:

20

Did you receive certifications from anyone at InnoVida that

I don't recall specifically pursuant to this -- pursuant to

Just look at what -- from Exhibit C(13), Bate Number ending


Are you familiar with this document?

"I, Craig Toll, the chief financial officer of

21

InnoVida Innorez, Limited, a company organized and

22

existing under the laws of the Cayman Islands (the

23

borrower), do hereby certify that:

24

"A, I am familiar with the terms of the loan agreement

25

between, among others, the borrower and Overseas

One" -- or rather,

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Private Investment Corporation (OPIC), dated as of

March 9, 2010 (as amended, 'the loan agreement')...

"and, B, I have read the covenants, representations,

warranties, and agreements of the borrower contained

in the loan agreement and have been represented by

counsel in connection with the loan agreement; C, I

have made or caused to be made such examination or

investigation as is necessary to enable me to express

an informed opinion as to the matters set forth

10

below."

11

"And pursuant to Section 5.05 of the loan

12

agreement do hereby certify that:

13

representations and warranties set forth in

14

Article III of the loan agreement are true and correct

15

in all material respects on the date hereof as if made

16

on the date hereof, and no event of default, and no

17

event or condition which with lapse of time or the

18

giving of notice, or both, would constitute an event

19

of default exists on the date hereof."

20

One, the

How important was this closing certificate,

21

Mr. Alford?

22

A.

23

disbursement of an OPIC loan, that the borrower makes these

24

certifications.

25

Q.

It is important.

Okay.

This is a condition that we have for any

And in this particular certification, is Craig Toll


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signing on behalf of InnoVida Innorez?

Right?

A.

Correct.

Q.

And InnoVida Innorez was one of the borrowers under the

loan agreement, right?

A.

Correct.

Q.

And pursuant to this certification, Mr. Toll is certifying

that the information -- the representation and warranties are

true and correct in all material respects, right?

A.

Correct.

10

Q.

Now, going back to subsequent financial statements, looking

11

at Exhibit C(11), do you recall that this financial statement

12

was also one provided by InnoVida to OPIC?

13

A.

14

consistent with financial statements that were furnished to

15

OPIC.

16

Q.

17

statement, again, the words "unaudited pro forma."

18

that?

19

A.

I do.

20

Q.

And just looking on this page, are there any disclosures on

21

this page, Mr. Alford?

22

A.

Meaning other than --

23

Q.

Are there any footnotes?

24

A.

No.

25

Q.

Are there any other notations on this page?

I don't recall this one specifically, but it looks

Okay.

Now, at the top of this particular financial


Do you see

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A.

No, not that I see.

Q.

Again, Mr. Alford, what was your understanding of the

financial statements that were being provided to OPIC pursuant

to the loan agreement?

A.

financial condition of the company.

Q.

The actual financial condition of the company.

A.

Correct.

Q.

Looking now at Exhibit C(22), this is now a balance sheet

That those financial statements are reflecting the

10

ending now March 31, 2010.

Are there any footnotes anywhere on

11

this document?

12

A.

No.

13

Q.

And looking at Bate Number ending 001788, which is now the

14

combined statement of operations for InnoVida Holdings, LLC,

15

any footnotes, any notations on this particular document?

16

A.

No.

17

Q.

This is for the period ending March 31, 2010, right?

18

A.

Correct.

19

Q.

So, looking at this particular statement, would you tell

20

the members of the jury, what are you thinking when you see

21

this statement?

22

A.

23

quarter of 2010.

24

Q.

25

fact, a good risk for OPIC's monies?

That the company is still making a profit in the first

Are you thinking then, Mr. Alford, that InnoVida is, in

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A.

take on OPIC debt and repay it.

Q.

Mr. Alford, what is the process by which a loan is approved at

OPIC?

A.

It's a profitable company and looks to have the ability to

Okay.

Would you explain to the members of the jury,

Sure.
So, a -- when a prospective borrower comes to OPIC,

and they present what their project is, they will file an

application asking for exactly how much they're seeking for a

10

loan and what the proceeds of the loan would be used for.

11

Q.

Um-hum.

12

A.

Then the project team would undertake with the borrower to

13

look at the project, try and understand it, as I said before,

14

trying to understand the company, what the proceeds would be

15

used for, the financial condition of the company, and do that

16

credit underwriting and legal underwriting, and present it for

17

approval to -- the approval process will vary slightly on the

18

size of the loan.

19

a commitment.

20

with the borrower, which, again, must be approved within OPIC.

21

And then, finally, a disbursement.

22

Q.

23

from OPIC was $10 million.

24

A.

Correct.

25

Q.

All right.

And then once approved, then take it through

And then after that, negotiate a loan agreement

The amount of money that InnoVida was seeking to obtain


Do you remember that?

Now, who approves a loan up to that $10 million

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mark?

A.

small/medium enterprise finance, and then the director of

credit policy.

Q.

Above that mark, does the approval process differ?

A.

It does.

the process, so similar in terms of underwriting and

presentation of a credit paper.

what we call our investment committee, which is chaired by our

So, at that time, approval was with the vice president for

The credit approval would be the first part of

But then it would move on to

10

president and CEO, which approves that.

And then, again, if

11

the loan is beyond a certain size, then it also goes to our

12

board of directors for approval.

13

Q.

14

monies come from to fund that loan?

15

A.

16

loan.

17

Q.

18

OPIC with respect to disclosures to be made on the financial

19

statements of InnoVida?

20

A.

21

delivery of audited financial statements, but no other waiver

22

that I'm aware of.

23

Q.

24

there are going to be any, that's addressed in Section 9.06,

25

right?

Now, a loan of up to that $10 million mark, where do the

So, in this case, we're using what we refer to as a direct


So, we draw from the U.S. Treasury to finance that loan.

To your knowledge, Mr. Alford, were there any waivers by

There was a waiver in connection with the timing of the

Okay.

In fact, your loan agreement calls for waivers, if

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A.

Correct.

Q.

And we're looking at Bate Number ending '1670, again, from

Exhibit 7A.

A.

only in writing, signed by the parties, so OPIC and the two

borrowers.

Q.

to the disclosures to be made in the financial statements

submitted by InnoVida?

And what does it say here about waivers?

It says that the provisions of the agreements may be waived

What -- do you know of any waivers in writing with respect

10

A.

Again, other than with respect to the timing of delivery of

11

audited financial statements, no, I'm not aware of any.

12

Q.

13

financial statements now of InnoVida.

Let's talk about the unaudited -- sorry -- the audited

14

You said there was a waiver, right?

15

A.

Correct.

16

Q.

And what did that waiver pertain to?

17

A.

The waiver had to do with when those audited financial

18

statements were due to OPIC.

19

Q.

20

OPIC?
MR. SHARPSTEIN:

21
22

How important were the audited financial statements to

Objection to the form of the

question.

23

THE COURT:

Overruled.

24

A.

Could you repeat the question, please?

25

Q.

Sure.
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Were the audited financial statements important to

OPIC?

A.

requirements, we require audited financial statements, again,

an external party who's auditing and vouching for the financial

statements.

Q.

monies are disbursed?

A.

No, not always.

10

Q.

What circumstances are they not required?

11

A.

It may be that the entities don't have enough operating

12

history, that then would warrant audited financial statements.

13

Q.

14

that there was an extension of the audited financial statements

15

to the date?

16

A.

17

was having its financial statements audited, and that given

18

it's worldwide operations, there were issues of coordinating, I

19

believe even a holiday with respect to one of their -- one of

20

their subsidiaries.

21

longer than expected.

22

that time.

23

Q.

24

a later date, right?

25

A.

Sure.

As in any OPIC transaction, as you saw from the

Now, are audited financial statements required before any

In this particular circumstance, do you know why it was

My recollection is that it was the first time that InnoVida

And so, it was just taking longer -And so, we granted a waiver to extend

So, you were expecting the audited financial statements at

Correct.
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Q.

Now, did you ever get any information with respect to the

company that InnoVida had engaged its services for that audited

financial statement?

A.

Yes.

Q.

Who was that?

A.

I don't recall.

Q.

Is the name Ernst & Young familiar to you?

A.

It is.

Q.

What was your understanding of who -- what Ernst & Young

10

was gonna be doing?

11

A.

12

financial statements.

13

Q.

14

InnoVida?

15

A.

Not that I recall, no.

16

Q.

Now, the first disbursement, do you recall how much that

17

was for?

18

A.

I believe 3.3 million.

19

Q.

And would you tell the members of the jury, how was that

20

money to be spent by InnoVida?

21

A.

22

materials necessary to make panels at its factory in the U.S.,

23

to then be shipped to Haiti for the construction of low-income

24

housing.

25

Q.

So, Ernst & Young was to perform the audit of the company's

Okay.

Did OPIC ever get audited financial statements from

That money was to be used to purchase the supplies and

The initial request, do you recall how much that was?


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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initial request, the very first request.

A.

I don't, no.

Q.

Okay.

Five million.

A.

It may have been, yes.

Q.

Now -- well, let me ask you this question.

whether or not there was a reduction in the amount of money

being sought by InnoVida from that first request to an amended

request?

Is the amount five million familiar to you?

10

A.

11

did come in at a higher amount, and we did have discussion

12

about that.

13

not comfortable that the amount could be used towards the

14

construction of the factory at that time.

15

reduced to just go towards the shipment of panels.

16

Q.

Shipment of panels to build houses, homes, right?

17

A.

Correct.

18

Q.

Now, were you aware, Mr. Alford, of any issues with respect

19

to eminent domain in Haiti?

20

A.

Yes.

21

Q.

Would you tell the members of the jury, what were those

22

issues?

23

A.

24
25

There was.

Do you know

There was a discussion with the company.

It

Primarily centered around the fact that we were

And so, it was

There are land issues in Haiti.

Sure.
So, issues in Haiti with respect to having title to

property, as well as the ability of the government to come in


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and take property.

It's a problem actually not unique to

Haiti, and OPIC often faces it in developing countries in which

it works.

Q.

any impact upon the loan agreement entered into between OPIC

and InnoVida?

A.

the company, InnoVida, for the construction of this factory.

And certainly we would have to settle any land issues about the

Now, the question of eminent domain in Haiti, did that have

It did, in that what OPIC was looking to do was to finance

10

site of the factory itself, whether it was to be leased,

11

whether it was to be bought, the land, that is, was to be

12

bought, where the factory would be -- would be placed.

13

Q.

14

to ship panels to Miami, was there an issue with respect to

15

eminent domain as it related to that particular objective of

16

the project?

17

A.

18

the panels would go to Haiti.

19

as the offtakers, or the NGOs, and the other entities, right,

20

which would take the panels from InnoVida and then try and

21

deploy them in the way that made the most sense to get the

22

houses in place for the people of Haiti.

23

Q.

24

an issue for InnoVida, or would that be an issue with respect

25

to the nongovernmental organizations?

But with respect to the panels and that first disbursement

No, in that the -- right, we would finance the panels, and


And then the -- what we refer to

So, with respect to the issue of eminent domain, was that

The offtakers as you

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say.

A.

Sure.
Principally an issue for the offtakers.

Q.

Why do you say that?

A.

Because when they're purchasing the panels for the

construction of the homes, and they then have the panels,

right, it is those offtakers that need to identify the sites

where they can put them, which then gets into the land issues

about whether there's sufficient title, whether there's the

10

risk of eminent domain from the government, depending on the

11

area, and then how that NGO, or the offtaker, then either sells

12

or donates the houses to the families that would occupy them.

13

Q.

14

it had contracts for offtakers, as you say?

15

A.

16

that we were financing was the construction of a factory to

17

build things.

18

to be able to repay the loan was if somebody bought the things

19

that they built.

20

was part of the security package and assigned to OPIC.

21

Q.

22

producing panels, right?

23

A.

Um-hum, yes.

24

Q.

Were the NGOs, the nongovernment organizations, also

25

important with respect to InnoVida shipping the panels from

Now, how important was it that InnoVida show to OPIC that

It was important to OPIC.

I mean that was -- the project

Obviously, the only way that InnoVida was going

And so, it was important.

Which is why it

Well, you talked about the factory and the factory in Haiti

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Miami to Haiti?

A.

Sure.

It was important to know that there was a use for the

things that we were financing.

Q.

And that use would come from where?

A.

Come from the offtakers, or NGOs, whoever they would be,

who would purchase the panels and then deploy the homes.

Q.

Now, is World Vision an -- what you call an offtaker?

A.

Yes.

10

Q.

Were you aware, sir, in the time that you were dealing with

11

InnoVida of any relationship between World Vision and InnoVida?

12

A.

Yes.

13

Q.

Okay.

14

was.

15

A.

Would you tell the members of the jury what that

Sure.

16

We -- one of the things that we required as proof in

17

connection with our disbursements was evidence of these

18

contracts for the off-tank arrangements.

19

furnished to OPIC was a statement saying that World Vision

20

would purchase -- I don't recall the specific number, but some

21

number of panels for use in Haiti.

22

Q.

You actually saw a document from InnoVida?

23

A.

Yes.

24

And one of the things

(Discussion had off the record between counsel)

25
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BY MS. FOSTER-STEERS:

Q.

a document that you saw?

A.

It is.

Q.

And what did you think of this particular e-mail and the

contract that -- well, let me ask, what did you think of this

particular e-mail when you got it?

A.

finding offtakers in Haiti.

Looking at Exhibit C(18), Bate Number ending '0484, is this

That it was showing that InnoVida was getting traction in

10

Q.

Now, with respect to assignments, okay, explain to the

11

members of the jury, did InnoVida -- if InnoVida acquired a

12

contract for an offtaker, what role would OPIC have with

13

respect to that particular contract?

14

A.

Right.

15

So, we had required that -- we were assigned rights in

16

those project agreements.

17

looking towards is the payment right, so that if -- if there

18

was trouble with InnoVida's ability to pay, and there was still

19

a payable from that offtaker, that we could take that directly.

20

Q.

21

was this a possible contract where OPIC would be assigned

22

rights?

23

A.

24

contract we'd expect to see.

25

Q.

Okay.

And principally there what we're

So, when you saw this particular e-mail, Mr. Alford,

It is an agreement.

I would -- not usually the form of

Why do you say that?


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A.

Well, usually a contract is, uhm, like our loan agreement,

setting out the specifics, not just with respect to the number,

but also the representations the parties are making or what

their agreements are in covenants and what the defaults are.

Q.

And did you receive any such documentation?

A.

With respect to World Vision?

Q.

Now, Mr. Alford, are you familiar, also, with a company by

the name of Royal Caribbean Cruise Lines?

A.

I am.

10

Q.

Would you tell the members of the jury how it is that

11

you're familiar with that.

12

A.

Not that I recall, no.

Sure.

13

So, InnoVida had also, uhm, had an agreement with

14

Royal Caribbean to build something for Royal Caribbean, not in

15

and around -- or I believe on the north shore of Haiti.

16

project wasn't specifically part of the OPIC financing, as it

17

didn't entail housing, which is what we were principally

18

looking to do.

19

and so certainly aware of it.

20
21

But we would receive updates on the project,

MS. FOSTER-STEERS:

May I have just a moment, your

Honor?

22

THE COURT:

23

(Discussion had off the record between counsel)

24

MS. FOSTER-STEERS:

25

That

All right.

I have no further questions, your

Honor.
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THE COURT:

Cross-examination.

2
3
4

CROSS-EXAMINATION
BY MR. SHARPSTEIN:
Q.

Good afternoon --

MR. SHARPSTEIN:

BY MR. SHARPSTEIN:

Q.

Good afternoon, Mr. Alford.

8
9

May it please the Court.

Now, so the jury understands, you're a lawyer,


correct?

10

A.

Correct.

11

Q.

And you were a lawyer for OPIC in 2009?

12

started?

13

A.

2007 is when I started.

14

Q.

2007.

15

A.

Correct.

16

Q.

And you graduated law school in '01, is that it?

17

A.

Correct.

18

Q.

And then I think you said you worked for a large law firm

19

in D.C.

20

A.

A -- multiple offices, but starting in D.C., correct.

21

Q.

What was the name of that firm?

22

A.

Jones Day.

23

Q.

Jones Day?

24

A.

Yes.

25

Q.

One of the biggest law firms in the world.

Is that when you

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A.

Correct.

Q.

Has offices all around the world.

A.

That it does.

Q.

And you worked in their structured finance group?

A.

It was termed "lending and structured finance," yes.

focused on the structured finance piece, but that was the name

of the group.

Q.

and banks around the world, correct?

Sophisticated lending transactions, involved with entities

10

A.

Correct.

11

Q.

And how long did you do that kind of work?

12

A.

From graduation until February of 2007.

13

Q.

So, that's about six years?

14

A.

Not quite.

15

Q.

Five or six years?

16

A.

Correct.

17

Q.

So, were you working on sophisticated transactions?

18

A.

I was.

19

Q.

What type of work were you doing?

20

A.

I was doing, uhm, a lot of derivatives work.

21

Q.

What -- the jury may not understand -- I don't -- what's

22

derivative work?

23

A.

24
25

Sure.
So, you may be familiar with swaps, where you're

trying to -FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


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Q.

Not really.

A.

Sure.

Why don't you break it down a little.

Where you're trying to cover certain risks, it might

be that you have a currency mismatch, where you've taken a loan

that you owe in dollars, but you earn your revenue in Japanese

yen.

you'll exchange the yen you receive for the dollars you need to

pay the loan.

Q.

And so, you enter into an agreement with a bank where

So, I take it that over that five years at Jones Day, you

10

looked at a lot of financial statements from companies,

11

correct?

12

A.

No, not particularly.

13

Q.

No?

14

A.

No.

15

Q.

What was your work?

16

what was your physical job in the course of these deals you

17

worked on at Jones Day?

18

A.

19

whether it was as the derivative transaction or other

20

obligations that were usually put together with newly formed

21

entities.

22

manufacturing entities.

23

Q.

24

to see what type of business they were, correct?

25

A.

What did you look at when you were --

So, we were -- I was structuring the specific transactions,

I rarely dealt with operating entities or

So, you were looking into operating manufacturing entities

No.
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Q.

Well, what did you do?

A.

(No response)

Q.

What kind of due diligence were you involved in then, in

regard to the derivative swaps that you've been talking about?

A.

sophisticated banks, uhm, the level of diligence would often

rely largely on the representations that the banks were making.

Q.

you didn't look behind it, you just took it for what it was,

So, with respect to, say, a transaction against two

Well, are you saying you took a representation of a bank,

10

and you did nothing more, is that it?

11

A.

12

correct.

13

Q.

14

was your job there in 2007 when you first arrived?

15

A.

16

counsel, to assist on the transactions that we do.

17

Q.

18

documents and things like that, to determine whether or not the

19

government, OPIC, should loan money to a particular company,

20

right?

21

A.

Part of my job, absolutely.

22

Q.

And the determining whether or not a company -- and the

23

prosecutor used this word -- was a good risk, right?

24

A.

Yes.

25

Q.

And -- by the way, let's tie this up, and then come back to

For my small piece of the transaction, that was my role,

So, you -- eventually, you come to work for OPIC, and what

My job then, as is what it is today, as assistant general

To look at a particular transaction, to look behind

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the beginning.

But OPIC loaned 3.3 million to InnoVida, and

InnoVida paid interest on that loan, did it not?

A.

I believe so, yes.

Q.

You believe so or you know?

A.

As far as I'm aware, they made their interest payments.

believe the September one was late, but it was ultimately paid.

Q.

in June of 2010, correct?

A.

Again, I believe that's correct, yes.

10

Q.

Well, did you -- didn't you make a statement to the FBI on

11

October 4, 2011?

12

A.

I don't recall the specific date.

13

Q.

Do you remember giving an interview telephonically, with

14

your lawyer there, to the prosecutor and the FBI agent?

15

A.

I do.

16

Q.

And you remember specifically telling them that OPIC was

17

paid by InnoVida 70,000 in June, 70,000 in September, and

18

70,000 in November of 2010, right?

19

A.

20

interview.

21

Q.

22

here today?

23

A.

Yes.

24

Q.

So, what are you saying?

25

A.

As far as I'm aware, they did make the payments.

Well, you know that they made interest payments of $70,000

I do not specifically recall saying that as part of the

Well, have you looked at the file when you came to testify

Did they pay or didn't they pay?

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Q.

So, they weren't -- that was -- they were up to date on

their loans through November of 2010, right?

A.

Yes.

Q.

And then you called it off in January of 2011, right?

You -- the default.

A.

OPIC, correct.

Q.

Okay.

8
9

So, let's go back to the beginning.

Now, you said in December of 2009, you were assigned


this file because it had already gotten through finance and was

10

ready to go?

11

A.

No.

12

Q.

What did you say?

13

A.

Sure.

14

I just wrote down some words here.

So, when a project comes to our finance team, and

15

they've evaluated it and think that they will take it forward

16

through the diligence process, through the underwriting

17

process, then they ask for a lawyer to be assigned.

18

was the point at which I was assigned.

19

Q.

20

This was initially when OPIC came to you, through Mr. Osorio

21

and met with OPIC and was discussing building homes in Haiti

22

even before the earthquake, right?

23

A.

Correct.

24

Q.

So, in December, '09, you're looking into that project as a

25

lawyer?

So that

We see in December of 2009, a hurricane hadn't occurred.

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A.

Correct.

Q.

And I believe that ended up with, in middle of December,

Ms. Tabernacki, or you, writing a letter to the company asking

for a $20,000 retainer, which was never executed, correct?

A.

I don't recall.

Q.

You don't recall that?

A.

I don't, no.

Q.

Have you discussed that recently or anything, to refresh

your recollection?

10

A.

No.

11

Q.

And then what happened was the heart -- the earthquake hit,

12

the horrible disaster in Haiti.

13

OPIC in a big way, right?

14

A.

What do you mean by that?

15

Q.

Well, didn't -- wasn't there a trip to Haiti with

16

President Clinton and Wesley Clark and the president of Haiti,

17

and a big push that InnoVida was gonna go there and build

18

houses?

19

A.

That was my understanding, yes.

20

Q.

And as a matter of fact, president -- the former

21

President Clinton was backing this company InnoVida, isn't that

22

right?

23

A.

24

Initiative.

25

backing from the ex-president.

And you -- InnoVida came to

I'm aware that InnoVida had been part of the Clinton Global
But I don't know that there was any specific

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Q.

Well, we're gonna get to that in a minute, but you went to

the meeting down in Miami, you said, right?

A.

Meeting with the company, yes.

Q.

In an office building, in a conference room in an office,

right?

A.

Correct.

Q.

There were a lot of pictures of Mr. Osorio around with

president -- former President Clinton, the current

President Obama, right?

10

A.

There were many pictures of Mr. Osorio with various

11

celebrities and politicians, but I don't recall specific

12

persons.

13

Q.

Well, he -- sorry.

14

If I've interrupted you, just tell me.

But during the course of that meeting, you were there

15

all day with Ms. Tabernacki, weren't you?

16

A.

Yes.

17

Q.

That was on January 21, 2010, right?

18

A.

I believe so.

19

Q.

And at that time, you hadn't received any financial

20

statements from the company, correct?

21

A.

I don't recall whether we had received it before.

22

Q.

Let me just -- well, you don't recall.

23

a minute.

24
25

And you were there all day.

I'll get to that in

Mr. Osorio put on

somewhat of a presentation for you, isn't that right?


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A.

He made a presentation about InnoVida, correct.

Q.

Do you remember who else was with him?

mentioned Mr. Toll.

A.

Yeah, Mr. Toll.

Q.

And his wife, Amarilis, who was leading the tour at the

factory, isn't that right?

A.

meeting.

the tour.

I recall meeting Amarilis.

I know you

She was in and out of the

I don't remember her being there all day or leading

10

Q.

Well, part of the discussion was Mr. Osorio's connections

11

with the Clintons, right?

12

A.

I don't recall that specifically.

13

Q.

Remember him telling you that they had met with Bill

14

Clinton just that prior Tuesday and were directly involved in

15

setting up, financing for the NGO to build the houses, to buy

16

the houses?

17

A.

18

that InnoVida was involved with the big push and a number of

19

organizations going down to Haiti to make a difference.

20

don't specifically recall the reference to --

21

Q.

22

something, Hillary Clinton, the Secretary of State, responds

23

immediately?

24

A.

No.

25

Q.

He told you that Wesley Clark, a former general of the

Do you remember that?

I remember that it was part of the overall conversation

Do you remember him telling you that when he wanted

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United States, was offering military support to bring down in

cargo -- military cargo planes some of the paraphernalia to

build the factory and to ship the panels.

A.

Again, I don't recall that specifically.

Q.

Well, you go there on the 21st, and there was significant

pressure on you from people in the government to move this loan

and get something going down in Haiti, isn't that right?

A.

There was --

Were we being directed to do something specifically?

10

Q.

Any -- go ahead, finish your answer.

11

A.

I'm sorry.

12

No.

There was an imperative to move quickly, because we

13

had a project that could be responsive to a specific need.

But

14

in terms of any direct pressure, no.

15

Q.

And so, you moved quickly, didn't you?

16

A.

We did.

17

Q.

I mean you've been at OPIC for a while now.

18

it generally take for an OPIC loan to get processed of this

19

size, $10 million?

20

A.

It could take many months, up to a year, sometimes longer.

21

Q.

This one took about five days?

22

A.

I believe two weeks from the time of the earthquake until

23

the commitment letter.

24

had come in before the earthquake.

25

Q.

How long does

And, of course, recall that the project

In December of '09, for ten minutes, is that right?


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A.

(No response)

Q.

I withdraw that.

You go down there, you visit, you look at the place,

January 21st of 2010.

commitment letter that you were talking about?

A.

Correct.

Q.

January 26, 2010.

8
9

And in evidence is C(5).

This is the

So, OPIC has committed to make this loan to the


borrower, Claudio Osorio, who acknowledges and agrees to his

10

obligations hereunder, five days after the meeting, right?

11

A.

Assuming the 21st date is correct, yes.

12

Q.

And it's -- this is in evidence, Exhibit 5, C(5).

13

there's Mr. Osorio signing for InnoVida, right?

14

A.

Correct.

15

Q.

And, in fact, C(4), which the prosecutor has shown you, the

16

first time that you get any financials from the company,

17

January 28th, two days later, right?

18

A.

That was what was on the prior e-mail, yes.

19

Q.

Let's take a look at C(4).

20

see the whole -- this is January 28th, two days later, after

21

the commitment is already signed, and it's to -- it's from

22

Craig Toll to Lynn Tabernacki, cc Osorio, press release and

23

financials.

24
25

And

This is -- back it up so we can

"Please let me know" -- this is Craig Toll to


Ms. Tabernacki -- "Please let me know when the press
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release is issued."

So, you were already ready to issue a press release on

this, correct?

A.

Q.

With respect to the commitment, correct.


"I also attach our consolidated unaudited

September 30th financials.

I would be pleased to

answer any questions you have on them.

from Mr. Toll.

Now, is -- did you get these financials, the ones that

Regards,"

10

the prosecutor showed you that were attached hereto?

11

A.

I did receive them and then become aware of them, yes.

12

Q.

Well, you became aware of them.

13

the lawyer?

14

A.

Lynn would have forwarded them on, yes.

15

Q.

Did you look at them?

16

A.

Yes.

17

Q.

Did you read them?

18

A.

Yes.

19

Q.

And other than that, what did you do?

20

A.

Nothing.

21

Q.

You were aware that InnoVida was a large group of companies

22

from around the world, correct?

23

A.

24

group of companies, yes.

25

Q.

Did they come to you as

That InnoVida Holdings was the parent company of a large

And so, the InnoVida -- what -- this comes to you as a


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financial statement.

And it says here:

"InnoVida group of

companies combined balance sheets."

A.

the InnoVida group of companies.

Q.

what?

this something you look at all the time, financial statements

from companies?

A.

Not that I personally look at all the time, no.

10

Q.

But I thought your job was to look at this, to review the

11

financial health of the company.

12

else's?

13

A.

That's part of OPIC's job.

14

Q.

OPIC.

15

A.

So, that's on the finance side particularly, so that would

16

be Lynn Tabernacki.

17

Q.

Finance side.

18

A.

Correct.

19

Q.

Lynn.

20

A.

Um-hum.

21

Q.

Not you.

22

A.

Correct.

23

Q.

Well -- so, what -- unaudited to you, you understood that

24

meant that it was their own financial statement.

25

A.

What did that mean to you?

Mean that it's representing the overall financial health of

Health.

It says the "combined balance sheet."

It means

What does that mean to laypeople that don't do -- is

Was that your job or somebody

Who at OPIC?

Prepared by management.
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Q.

Not audited by a bigger company, right?

A.

Correct.

Q.

And what did "pro forma" mean to you?

A.

As I stated before, I don't think it meant anything to me.

Q.

Nothing.

So, at the time, you didn't look at it, right?

A.

(No response)

Q.

It didn't mean anything to you.

A.

No, "pro forma" did not mean anything to me.

10

Q.

Did you ask any questions about it?

11

A.

Not that I recall, no.

12

Q.

Did you call Mr. Toll to ask him what it meant?

13

A.

No.

14

Q.

See, on the e-mail here, it says:

15

"I would be pleased to answer any questions you

16

have on them.

17

Regards, Craig Toll."

So, did you call to ask any questions?

18

A.

Did I call with respect to questions on the financial

19

statements?

20

Q.

Yeah.

21

A.

No.

22

Q.

So, it really wasn't your job to review this financial

23

statement.

24

A.

Correct.

25

Q.

Like ask questions like the cash and cash equivalents of

That was Lynn Tabernacki's job.

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35 million, where is that?

right, you didn't ask anything.

Did you ask that?

Or -- oh, that's

You just read it.

But I think you said -- you told the jury that you

looked at this, and it looks like they have some good financial

health.

A.

That they are an entity with substantial assets, yes.

Q.

Because I think you said you looked at the bottom line

here, on the third page of this, under the September 30th, and

you looked at that bottom line of net income, almost a ten --

Right?

10

nine-and-a-half million dollar profit, right?

11

A.

Yes.

12

Q.

But what if the company -- you said the company made

13

panels, right?

14

A.

Correct.

15

Q.

Did somebody tell you they were making a lot of money from

16

selling the panels?

17

A.

I don't understand the question.

18

Q.

Well, they told you it was a company that at the time was

19

selling factories, the interests in building these factories

20

around the world, right?

21

A.

22

yes.

23

Q.

24

panels?

25

A.

That they built factories that manufactured the panels,

And did anybody tell you they weren't really selling many

I don't recall.
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Q.

Well, take a look at the -- this revenue section, where it

says "furnished goods" -- "finished goods" -- I'm sorry.

you see that?

A.

Yes.

Q.

I mean you take a look at it.

of an accountant's eye to see that they made zero from selling

any kind of panels, right?

A.

Correct.

Q.

So, you had this information right there.

Do

It really doesn't take much

Did you want to

10

look behind it or investigate that at all or ask any questions?

11

A.

I don't recall.

12

Q.

So, I guess, as far as you're concerned, this was not your

13

job, the financial statement had nothing to do with you.

14

was Lynn's job, right?

15

A.

16

involved on all aspects.

17

assessments and decisions, yes, on the financial side, that's

18

ultimately Lynn's call.

19

Q.

Was there a press releases that was issued?

20

A.

I believe so.

21

Q.

That OPIC was partnering up with InnoVida to build houses

22

in Haiti.

23

A.

(No response)

24

Q.

Right?

25

A.

I don't recall the specific contents.

That

Again, as a project team member, right, it's my job to be


But in terms of ultimately making

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


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Q.

I didn't see it.

I don't know.

So the jury understands, after the commitment, which

was signed January 26, 2010, then you get involved in the file

to negotiate the actual loan agreement with Shutts & Bowen,

right?

A.

Correct.

Q.

And you dealt with Al Smith at Shutts & Bowen, right?

A.

Correct.

Q.

So that any questions you had, you went to him, right?

10

A.

Yes.

11

Q.

Did you ask him anything at all about the unaudited

12

pro forma financial statements?

13

A.

Not that I recall, no.

14

Q.

There was an issue that arose as far as the audited

15

financial statements.

16

company had not had audited financial statements, right?

17

A.

Yes.

18

Q.

Because they were relatively young, hadn't made a nickel

19

selling panels, so they told you they hadn't had anybody audit

20

their financials yet, right?

21

A.

Correct.

22

Q.

But OPIC was willing to stick their neck out and give them

23

their money as a loan, right?

24

A.

OPIC was willing to distribute the loan, yes.

25

Q.

Which, again, because I don't think the jury heard this

You were aware of the fact that this

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enough, they got paid their interest on, right?

$210,000 from

the company, right?

A.

Yes.

Q.

The negotiations also -- and so, to finish off this on the

audited, there was an extension of the time that OPIC was

willing to afford the company to have audited financials,

right?

A.

Correct.

Q.

They -- you were told, through Mr. Smith, that the company

10

was hiring Ernst & Young, right?

11

A.

12

communications were not directly from me through Mr. Smith.

13

certainly had joint communications.

14

phone with Mr. Toll and Mr. Osorio and Mr. Smith.

15

Q.

16

and Mr. Osorio.

17

Young, right?

18

A.

Correct.

19

Q.

That there were some issues and problems that arose along

20

the way.

21

It was something OPIC was willing to do, right?

22

A.

Correct.

23

Q.

And there were issues with the project, the definition of

24

the project, that dealt with the conditions in Haiti, isn't

25

that right?

I don't know that it was through Mr. Smith.

All
We

Lynn and I would be on the

So, from time to time, you were on the phone with Mr. Toll
And you learned that they had hired Ernst &

So, you extended the time for the audited financial.

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A.

What do you mean?

Q.

Well, there were some serious political and legal issues in

regard to Haiti after the earthquake, isn't that right?

it dealt with building anything on property.

A.

Yes.

Q.

I mean you talked to Ms. -- the prosecutor here, about the

eminent domain issue.

A.

Um-hum.

Q.

Just so the jury understands, that deals with no one really

When

10

knew who owned the land, right?

11

A.

Correct.

12

Q.

So, how were we gonna build houses or a factory on

13

something if people didn't know they were gonna own it, right?

14

A.

Correct.

15

Q.

And the NGOs, like the Clinton Initiative, World Vision,

16

all had problems.

17

build a house, they had problems.

18

of the governmental and legal issues, right?

19

A.

That's my understanding, yes.

20

Q.

So, along the way, you learned that OPIC -- I mean --

21

excuse me -- that InnoVida partnered up with Royal Caribbean

22

and built a school, right?

23

A.

Yes.

24

Q.

I mean you knew that, right?

25

A.

Yes.

Even though their good intention was to


They couldn't do it because

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Q.

They built a school.

While we're waiting and having

problems, we're gonna put a school up, which they did, right?

A.

Yes.

Q.

I mean, and InnoVida built other things in Haiti, didn't

they?

A.

things.

Q.

Nothing else?

A.

I don't recall.

10

Q.

Do you remember an office building that they built, some

11

bungalows?

12

A.

No.

13

Q.

Shelters?

I only recall the school.

14

They may have built other

I don't recall, no.

No?

Nothing.

Did you know what was going on down there?

15

A.

(No response)

16

Q.

You, yourself, keep any tabs --

17

A.

With respect to --

18

Q.

Did you keep any kind of communication with anybody down

19

there?

20

A.

21

Sure.
So, as part of the U.S. government, we frequently

22

reach out to the embassy to get an understanding of the

23

situation on the ground.

24

Q.

25

from InnoVida with pictures of structures they were working on,

And you learned in the course of that -- you got reports

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right?

A.

Correct.

Q.

So, because of these issues, even before you started in the

loan documents, because problems were already anticipated by

March when the loan was signed, the agreement, you and

Mr. Smith worked on changing the definition of what the project

was, isn't that right?

A.

The definition of "project" did change, correct.

Q.

It expanded a bit, correct?

10

A.

I believe that's correct, yes.

11

Q.

Because they knew they were gonna have problems building

12

the houses, right?

13

A.

No, I don't believe that was the basis for it.

14

Q.

You put in the words "other structures" into the terms,

15

right?

16

A.

We did.

17

Q.

Other structures like schools?

18

A.

Other structures relating to whatever the home community

19

environment would be.

20

example.

21

Q.

22

school, right?

23

A.

Correct.

24

Q.

Supermarket, where the people shop.

25

supermarket they built?

Like the Royal Caribbean one.

So, it could have been school, for

A school, where the kids who lived in the home go to the

Were you aware of a

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A.

I don't recall, no.

Q.

But you and Mr. Smith redefined "project" to expand it,

correct?

A.

To include other structures relating to the housing, yes.

Q.

Well, originally, it was that they were gonna build a

factory there right away, right?

A.

Yes.

Q.

But then between January, the commitment, and March, it

became readily apparent that was not gonna be so easy, right?

10

A.

(No response)

11

Q.

Remember that?

12

A.

Until you get the factory in place, that's correct.

13

Q.

So, you allowed in the definition of "project" that they

14

would ship panels over there, right?

15

A.

Correct.

16

Q.

From their Miami factory.

17

A.

Yes.

18

Q.

Which they did, right?

19

A.

I believe so.

20

Q.

There were warehouses full of the panels there, were they

21

not?

22

A.

I don't know.

23

Q.

And when they couldn't build the houses, they built a

24

supermarket, a school, other things, right?

25

A.

I don't know.
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Q.

And were in the process of building about 90 houses, right?

A.

Again, I don't know.

Q.

When you, OPIC, pulled the plug and didn't fund the rest of

the loan.

A.

Upon the default letter, yes.

Q.

The default letter that you wrote.

Do you remember that?

Did you write that letter?

A.

OPIC issued, yes.

Q.

Because the default having something to do with some -- a

10

lawsuit that the company was involved in, correct?

11

A.

12

one of which included failure to notify us of lawsuits,

13

correct.

14

Q.

I believe the default letter referenced a number of things,

Well, it notified about -MR. SHARPSTEIN:

15

Get the default letter.

16

BY MR. SHARPSTEIN:

17

Q.

-- it notified about not reporting lawsuits, right?

18

A.

If we could bring it up, please.

19

Q.

We can bring it up.

20
21

C(44).
page.

22

It's in evidence.

C(44) is in evidence.

I'll show you the first

Written February 8, 2011.


"Ladies and gentlemen" -- did you write this letter?

23

Can't remember who signed -- let's see.

24

James C. Polan, vice president, SMEF.

25

A.

It was signed by

What is that?

Small and Medium Enterprise Finance, one of our financing


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groups.

Q.

go in here, it says:

And the grounds for the default are on page 2 of 44.

If we

"(a), the parent company is in default of the

covenant set forth in 6.06... which requires the

parent company to deliver to OPIC, within 90 days of

the end of each fiscal year, the audited consolidated

financial statements for the parent company."

Right?

10

A.

11

Q.

Correct.
"And failed to notify OPIC of the

12

commencement of any legal or arbitral

13

proceedings."

14

And that there were lawsuits filed in August and

15

September.

16

A.

For those two reasons, correct.

17

Q.

It wasn't defaulted because they hadn't paid their loan, is

18

that right?

19

A.

20

agreement, but, correct.

21

Q.

They were current in their loan, weren't they?

22

A.

Correct.

23
24
25

That was why it was defaulted.

Failure to pay is one of many defaults in the loan

THE COURT:

Mr. Sharpstein, is this a good spot to

take a break?
MR. SHARPSTEIN:

Yes, your Honor.

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THE COURT:

All right, members of the jury, we're

going to take a 15-minute recess.

Remember my admonition not

to discuss the case or allow it to be discussed in your

presence.

15 minutes.

And we'll see you back in the jury room in

COURTROOM SECURITY OFFICER:

(The jury exited the courtroom)

THE COURT:

9
10

Mr. Alford, during the break in your

testimony, you're not allowed to discuss your testimony with


anyone.

11

Do you understand?

12

THE WITNESS:

13

THE COURT:

14

THE WITNESS:

15

THE COURT:

16

Please rise for the jury.

I do.

And we'll see you back in 15 minutes.


Thank you.

And if there's nothing else to come before

the Court, we'll be in recess for 15 minutes.

17

(The Judge exited the courtroom)

18

(Recess taken at 3:34 p.m. until 3:56 p.m.)

19

(The Judge entered the courtroom)

20

THE COURT:

Please be seated.

21

All right.

We're back on the record.

22

Counsel are present.

23

Anything to come before the Court before we bring the

24
25

Mr. Toll's present.

jury in?
MS. FOSTER-STEERS:

No, your Honor.

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MR. SHARPSTEIN:

No, your Honor.

THE COURT:

Mr. Alford back on the stand.

All right.

I guess we need to get

(The witness entered the courtroom)

THE COURT:

And, Mr. Alford, do you understand you're

still under oath?

THE WITNESS:

THE COURT:

(The jury entered the courtroom)

10
11

THE COURT:

Yes.

All right.

Let's bring the jury in.

Counsel concede the presence of the jury

and waive its polling?

12

MS. FOSTER-STEERS:

13

MR. SHARPSTEIN:

14

THE COURT:

Yes, your Honor.

Yes, your Honor.

And did everyone follow my admonition not

15

to discuss the case or allow it to be discussed in your

16

presence?

17

All right, Mr. Sharpstein, you may continue.

18

MR. SHARPSTEIN:

19

I have no more questions for the

witness, your Honor.

20

THE COURT:

Redirect.
REDIRECT EXAMINATION

21
22

BY MS. FOSTER-STEERS:

23

Q.

24

letter, dated January 21, 2010.

25

A.

Mr. Alford, Mr. Sharpstein asked you about the commitment

Yes.

Do you remember that?

The 26th, I believe, but, yes.


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Q.

Now, can you explain to the members of the jury what a

commitment letter is?

A.

Sure.

So, it's a letter sending out OPIC's commitment to

finance a project, subject to a number of conditions, one of

which is continuing due diligence on the project itself.

Q.

been a loan or loan agreements entered into between OPIC and

InnoVida?

Okay.

Now, does a commitment letter mean that there has

10

A.

No.

11

Q.

Would financial statements be required before the issuance

12

of a commitment letter?

13

A.

14

underwriting before issuance of a commitment letter, but

15

certainly required before issuance of -- or signature on the

16

loan agreement.

17

Q.

18

received by OPIC before the loan agreement is actually signed,

19

right?

20

A.

It's one of the conditions to disbursement --

21

Q.

Yes.

22

A.

-- itself.

23

situation where a loan agreement is executed, but, again, the

24

condition to disbursement would be receipt of financial

25

statements.

Generally, financial statements would be part of the

So, it must be done -- the financial statements must be

So, it is generally the case.

There may be a

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Q.

gives out or disburses its money, right?

A.

Correct.

Q.

Now, Mr. Sharpstein also asked you whether or not you

questioned Mr. Smith about the unaudited financial statements

that you received from InnoVida.

question?

A.

I do.

Q.

Why didn't you question Mr. Smith?

10

A.

Mr. Smith wouldn't be the appropriate person for questions.

11

Q.

Who would be?

12

A.

Mr. Toll.

13

Q.

Now, Mr. Sharpstein also asked you about the default

14

letter.

15

A.

Correct.

16

Q.

And, in fact, the default letter that he put on the screen

17

showed that there were two reasons why OPIC defaulted on the

18

loan, right?

19

A.

Yes.

20

Q.

All right.

21

lawsuit -- to notify OPIC of a lawsuit, right?

22

A.

Correct.

23

Q.

Can you explain that to the members of the jury?

24

A.

Sure.

25

So, it's a condition before OPIC actually sends out or

Do you remember that

Do you remember that?

One was the failure to notify them of a

So, our loan agreement with InnoVida, like with all of


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OPIC's loan agreements, requires that the company give us

notice of certain events.

against the company.

if it's litigation above a certain amount.

case, there was a -- was a threshold, and the litigation was

above that amount.

lawsuits.

Q.

pursuant to the terms of the loan agreement?

One of those events is litigation

Uhm, there may be certain thresholds that


I believe in this

The company did not inform us of the

We had learned of them separately.

So, was that grounds for issuing a default to InnoVida

10

A.

Yes.

The loan agreement sets out a number of grounds for

11

default, any one of which can result in acceleration of the

12

loan.

13

Q.

14

financial statements, was that another reason for the default?

15

A.

16

agreement as amended, correct.

17

Q.

18

from InnoVida, right?

19

A.

Correct.

20

Q.

Now, Mr. Sharpstein also asked you about the building of a

21

school by Royal Caribbean Cruise Lines.

22

questions?

23

A.

Yes.

24

Q.

And he asked you about the term "structures" being included

25

in the project, the definition of project.

And that would be one.

And the unaudited financial -- sorry -- the audited

Failure to deliver them on the time required in the loan

Because OPIC never received audited financial statements

Do you remember those

Do you remember

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that?

A.

I do.

Q.

Now, are you aware -- or are you familiar with a progress

report submitted to OPIC by InnoVida?

A.

(No response)

Q.

The progress reports.

A.

In connection with the disbursement request, yes.

Q.

I'm looking at Exhibit C(18).

A.

(No response)

10

Q.

Do you see that?

11

A.

Yes.

12

Q.

Is this a progress report?

13

A.

Oh, yes, it is, sorry.

14

Q.

Okay.

15

relationship with "World Vision, a well-known aid

16

organization," right?

17

A.

(No response)

18

Q.

Correct?

19

A.

Yes, yes.

20

Q.

And it goes on further that the World Vision had already

21

"purchased 2,800 transitional shelters from another supplier."

22

Is this a progress report?

And in the second paragraph, it references a

Now, did you look at this back then?

23

A.

I did, yes.

24

Q.

Okay.

25

forth here that the contract with World Vision related to

And would World Vision having -- or it being set

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transitional shelters, would that have been something that

would have been approved by OPIC with respect to this

particular loan?

A.

(No response)

Q.

Do you understand my question?

A.

Could you ask it again, please?

Q.

Sure.

8
9

We're looking at World Vision.


transitional shelters, right?

We're looking at

The monies that OPIC was going

10

to be loaning to InnoVida, those were -- monies were to be used

11

to do shelters, right?

12

A.

Correct.

13

Q.

And then further on down, it talks about:

Houses?

Homes?

14

"We have recently been awarded, through our

15

partner, DRC Emergency Services, a contract to build

16

80 dwellings and four common area rooms for an UN

17

agency."

18

Do you see that?

19

A.

I do.

20

Q.

Now, isn't it true, Mr. Alford, that InnoVida represented

21

that the monies disbursed to it in the first disbursement were

22

used with respect to that World Food contract, right, according

23

to them -- and we're looking at Bate Number '0429 -- and with

24

respect to that purported World Vision contract?

25

A.

Correct.
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Q.

No reference to the Royal Caribbean Cruise Lines, right?

A.

Correct.

Q.

No reference to a school being built for Royal Caribbean

Cruise Lines.

A.

Correct.
MS. FOSTER-STEERS:

6
7
8
9

I have no further questions, your

Honor.
THE COURT:

Thank you, sir.

You may step down.

You're excused.

10

THE WITNESS:

11

(Witness excused)

12

THE COURT:

13

MS. FOSTER-STEERS:

14

The United States calls Tim LaMacchia.

15

THE COURT REPORTER:

16
17

Thank you.

The government may call its next witness.


Yes, your Honor.

Please raise your right hand.

(TIM LA MACCHIA, GOVERNMENT'S WITNESS, WAS SWORN)


THE COURT REPORTER:

Please sit down.

Please stay

18

close to the microphone, state your full name for the record,

19

spelling your last name.

20

THE WITNESS:

Tim LaMacchia, L-A-M-A-C-C-H-I-A.

21

MS. FOSTER-STEERS:

Your Honor, at this time, pursuant

22

to Federal Rule of Evidence 902(11), the United States would

23

move into evidence Exhibits B(1) through B(27).

24
25

MR. SHARPSTEIN:

Your Honor, the -- could we just

approach sidebar briefly?


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THE COURT:

Okay.

(At the bench out of the hearing of the jury)

MR. SHARPSTEIN:

We just have one issue here.

We were

told -- before the weekend, we were given a list of about six

or seven witnesses who would be next.

And they -- remember, they didn't give us a set of exhibits.

So, we've been pulling exhibits as the witnesses went.

didn't pull his, because we didn't think he was coming.

we're gonna have to look at these exhibits just to -- you know,

He wasn't one of them.

10

we haven't reviewed them.

11

this, but it just kind of took us by surprise.

12

other people we lined up.

13

MR. GERSTIN:

We
So,

I don't want -- I don't like to do


And we had

We pulled exhibits all weekend.

And if I could just add, the issue with

14

these exhibits is that they're in native format.

15

spreadsheets that are attached, and they're not easy to just

16

print.

17

THE COURT:

18

them one at a time.

Just go one at a time.

There are

Just introduce

19

MS. FOSTER-STEERS:

Okay.

20

(The foregoing proceedings were had at sidebar)


DIRECT EXAMINATION

21
22

BY MS. FOSTER-STEERS:

23

Q.

Mr. LaMacchia, are you employed, sir?

24

A.

Yes.

25

Q.

Can you tell the members of the jury where it is that


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you're employed?

A.

I'm a partner with Ernst & Young.

Q.

And what is the business of Ernst & Young?

A.

It's an auditing firm, CPA firm.

Q.

An auditing firm?

A.

Yes.

Q.

Okay.

Young?

A.

Since May of 2002.

10

Q.

And would you tell the members of the jury what it is that

11

you do for Ernst & Young?

12

A.

13

statements.

14

Q.

15

the members of the jury what an "audit" is.

16

A.

17

the basis to express an opinion on financial statements as to

18

whether they comply with Generally Accepted Accounting

19

Principles.

20

Q.

21

that you at Ernst & Young conduct an audit.

22

A.

23

process, where you develop the plan, the tests that you're

24

going to conduct, the scopes of the tests that you're going to

25

use.

Sir, how long have you been employed with Ernst &

I'm an audit partner, and I express opinions on financial

When you say you're an "audit partner" -- well, explain to

An "audit" is a process of tests, inquiries to formulate

And how do you conduct an audit?

Each audit is different.

Explain to them how it is

Uhm, it starts with a planning

And then you conduct a lot of tests, you ask a lot of


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questions, you get representations from management, and you

take in all the evidence, and then ultimately you express an

opinion on the financials.

Q.

tell the members of the jury whether or not you hold any

licenses?

A.

Florida.

Q.

How long have you had license as a CPA?

10

A.

Since 1986, I believe.

11

Q.

And where did you -- you have a degree, right?

12

A.

Yes, from Florida International University.

13

Q.

Okay.

14

A.

Yes.

15

Q.

And what is your degree in, sir?

16

A.

Bachelor of accounting.

17

Q.

Do you have any other degrees?

18

A.

No.

19

Q.

And where did you get that degree -- when, when?

20

A.

That was in 1985.

21

Q.

Now, after graduating from FIU, where did you work?

22

A.

I began in January of '86 at Arthur Andersen, another CPA

23

firm.

24

Q.

Was that in Miami?

25

A.

Yes.

We're gonna come back to that, Mr. LaMacchia.

But can you

I'm a CPA, or certified public accountant, in the state of

FIU?

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

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Q.

Yes.

A.

Began as a staff accountant conducting audits.

Q.

And how long did you stay at Arthur Andersen?

A.

Until May of 2002.

Q.

And is that when you began with Ernst & Young?

A.

Yes.

Q.

Now, you told me that you were a staff accountant at Arthur

Andersen.

Andersen?
No.

And what did you do, sir?

Did you remain a staff accountant at Arthur

10

A.

I progressed through the ranks and made partner at

11

Arthur Andersen.

12

Q.

13

Andersen?

14

A.

1998, I believe.

15

Q.

And when you -- well, when you left from Arthur Andersen to

16

go to Ernst & Young, what was your position when you began at

17

Ernst & Young?

18

A.

I began at Ernst & Young as a partner.

19

Q.

An auditing partner?

20

A.

Yes.

21

Q.

Okay.

22

anybody?

23

A.

24

conducting the detailed audit work.

25

Q.

Okay.

Yes.

So, when is it that you made partner at Arthur

Now, as an auditing partner, do you supervise

I supervise the engagement team that would be

Now, you're gonna have to explain to the members of the


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(954)769-5657

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jury what an "engagement team" is.

A.

are seniors that supervise the staff people.

that supervise the seniors.

supervise the managers.

supervise all the above.

Q.

big -- or, rather, how many people would be in an engagement

team?

Typically, they're staff people just out of college.

There

There's managers

And there's senior managers that

And then I, the partner, would

So, your engagement team -- I mean how big a team -- how

10

A.

11

but generally a minimum of four or five and as many as 20 or

12

30.

13

Q.

14

audit is, explain to the members of the jury, when an

15

individual comes to Arthur Andersen -- sorry -- not Arthur

16

Andersen -- but Ernst & Young, to have the company conduct an

17

audit, take us step-by-step the process that is taken.

18

A.

Can you clarify for me?

19

Q.

Sure.

20

It depends.

Varies greatly depending on size of the job,

Now, going back to what you told us in terms of what an

Somebody comes to Ernst & Young to have Ernst & Young

21

conduct an audit and then to issue an opinion, right?

Take the

22

members of the jury step-by-step through that process.

What is

23

involved?

24

A.

25

And, again, you know, the audit does consist of several phases.

There's a lot involved.

And each audit is very different.

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(954)769-5657

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The beginning phase would be the planning phase, where you're

designing -- understanding the business first, and then

designing and developing your scopes, you know, what level of

testing you're going to be conducting; then actually laying out

your test plans to conduct those tests; conducting those tests,

and then ultimately drawing conclusions regarding those tests.

Q.

need from the client?

A.

Now, in order to do that planning, what information do you

Quite a bit of information.

Uhm, you know, tough to recant

10

all of it here, but a lot of access to the company records, a

11

lot of interviews, discussion back and forth about the business

12

of the company, access to the general ledgers, the detailed

13

accounting records, access to personnel within the

14

organization, and then access to the -- some of the vendors and

15

customers the company does business with.

16

Q.

Okay.

17

A.

But, again, in -- that's some of the things, but you

18

need -- the audit can encompass a lot more than that, as well.

19

Q.

20

you need a lot of information from the company?

21

A.

Yes.

22

Q.

And you use that information then to determine the scope,

23

you said, right?

24

A.

Yes.

25

Q.

Okay.

So, is it correct to say, then, that at a planning stage,

Explain to the members of the jury what the scope


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is.

A.

company does; you test some of the transactions.

develop a scope to figure out which of the transactions you're

going to test.

determining what is meaningful or material to a user of the

financial statements.

amount might be, and then from that, you develop your testing

scope, how much you're going to test.

In an audit, you don't test every single transaction that a


So, you

You -- part of developing that scope is

So, you determine what that number or

10

Q.

And once you've determined how much you're gonna test, what

11

happens after that?

12

A.

Then you design your tests and can conduct those tests.

13

Q.

And is the scope is determined by the members of the

14

engagement team that you talked about?

15

A.

Yes.

16

Q.

Okay.

17

right?

18

A.

(No response)

19

Q.

Or the client.

20

A.

Yeah, in part from information from the company and part

21

from firm standards, but, yes.

22

Q.

23

then you draw your conclusions, right?

24

A.

Yes.

25

Q.

Okay.

Based upon the information provided by the company,

And then, finally, we come to -- you conduct the tests, and

To issue an opinion?
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A.

Yes.

Q.

Okay.

engagement team does not get information from the company, what

happens?

A.

putting it on a list, and getting information, and then

re-requesting information on a list and adding it, more

information as the audit goes on, and following up on the

information you didn't get.

Now, if along the way, the audit -- or, rather, the

Well, there's a constant process of requesting information,

And it's just an ongoing process,

10

ongoing part of an audit.

11

Q.

12

conducted?

13

A.

(No response)

14

Q.

How long does it take?

15

A.

It varies -- varies greatly.

16

deadlines, where the audit has to be done within a particular

17

time horizon, and others don't.

18

Q.

19

a company by the name of InnoVida.

Okay.

Is there any set period of time that an audit is

Some companies have

Now, Mr. LaMacchia, I want you to direct your attention to

20

Okay.

Are you familiar with that company?

21

A.

Yes.

22

Q.

Would you tell the members of the jury how it is that

23

you're familiar with the company InnoVida.

24

A.

25

InnoVida in -- I think it was nine -- 2008, I believe,

I began auditing InnoVida, uhm, attempting audit of

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2008-2009, around that time horizon.

Q.

2008?

A.

and asking me if I was interested in conducting an audit of the

company.

Q.

Who did you get that call from?

A.

Craig Toll.

Q.

Was it by telephone that you got the contact?

10

A.

Yes.

11

Q.

All right.

12

A.

Yes.

13

Q.

Okay.

14

Mr. Toll.

15

A.

16

partner role on an engagement of ours, on a job of ours called

17

Far and Wide Travel, and Craig was the CFO of Far and Wide

18

Travel.

19

Q.

And when was this?

20

A.

That would have been shortly after my coming over in May of

21

2002, so sometime maybe in the year after that, I would

22

imagine, somewhere in that time horizon.

23

Q.

So, in or around 2003?

24

A.

Yeah, 2002-2003.

25

Q.

All right.

And how is it that you came to be auditing InnoVida in

I got a call from the company describing the company to me

Had you known Mr. Toll before?

Tell the members of the jury how it is that you knew

When I became a partner at Ernst & Young, I assumed the

Do you remember?

Had you actually met Mr. Toll?

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A.

In that time horizon, yes.

Q.

Mr. Toll was employed by a company called Far and Wide, is

that what you said?

A.

Far and Wide Travel, yes.

Q.

Do you know what the business of Far and Wide was?

A.

Yes.

Q.

And do you know what Mr. Toll's position was at Far and

Wide?

A.

He was chief financial officer.

10

Q.

Now, did you have to deal directly with Mr. Toll in your

11

relationship with Far and Wide?

12

A.

Yes.

13

Q.

How often?

14

A.

I don't recall.

15

don't recall in terms of frequency.

16

interacted a lot.

17

Q.

Do you know Mr. Toll's background professionally?

18

A.

Limited.

19

Touche.

20

beyond that, I don't.

21

Q.

22

of Deloitte & Touche?

23

A.

24

Young.

25

Q.

It was an accumulation of travel agencies.

We dealt with each other a lot, but I


But we definitely

I know he had some involvement with Deloitte &

And then also was involved with CHS, I believe.

And

Can you tell the members of the jury what is the business

They're a CPA audit firm, like Arthur Andersen and Ernst &

Do you know what Mr. Toll's position was at Deloitte &


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(954)769-5657

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Touche?

A.

I believe Craig was a partner.

Q.

An audit partner, do you know?

A.

I don't.

Q.

All right.

involved with CHS?

A.

Yes.

Q.

Do you know what the business of CHS was?

A.

I believe it was computer distribution.

10

Q.

Do you know what his position was at CHS?

11

A.

I believe CFO.

12

Q.

Do you know whether or not Mr. Toll held any licenses,

13

Mr. LaMacchia?

14

A.

I do not.

15

Q.

Now, when you were contacted by Mr. Toll in 2008, what

16

request did he make of you?

17

A.

18

an audit of InnoVida.

19

Q.

Did he provide you with any information?

20

A.

I think at the time he directed me to a website.

21

Q.

Okay.

22

A.

And then I think there was information subsequently

23

provided.

24

Q.

25

after that?

And you said that you also knew that he was

The request was asking me if I was interested in conducting

Do you recall what type of information was provided to you

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A.

You know, I mean initially, it was a website that described

the company, and then after that, as we were gathering

information on the company, it was all kinds of information,

leading towards the audit, and then there was a lot of

information back and forth.

Q.

Okay.

A.

It's hard to distinguish between all that.

Q.

Well, let me ask you this question.

or not Ernst & Young was going to be conducting an audit for

In determining whether

10

InnoVida, was information requested of the company?

11

A.

Yes.

12

Q.

And did you request information of Craig Toll?

13

A.

We did.

14

Q.

Mr. Toll's position at InnoVida, do you know what that was,

15

sir?

16

A.

Chief financial officer.

17
18

MS. FOSTER-STEERS:

May I approach the witness, your

Honor?

19

THE COURT:

Okay.

20

BY MS. FOSTER-STEERS:

21

Q.

22

Exhibit B(1) for identification.

Mr. LaMacchia, I am handing you what has been marked as

23

Do you recognize that, sir?

(Government's Exhibit B(1) marked for identification)

24

A.

Yes.

25

Q.

Okay.

What is it?
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

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A.

It's a memo from Craig to me with some information on the

company.

Q.

Okay.

A.

Background information on the company.

Q.

Now, is that memo made by somebody in the company -- in

Ernst & Young?

A.

That's a memo from Craig to me.

Q.

All right.

memo that is kept by Ernst & Young in the normal course of

Well, let me ask you this question.

Is that a

10

business for Ernst & Young?

11

A.

12

retain, but it was information -- it was information gathering

13

process -- part of the information gathering process for us.

14

Q.

15

would that be in the kept in the normal course of business of

16

Ernst & Young?

17

A.

This particular?

18

Q.

Yes.

19

A.

I -- yeah, I believe this was a part of our papers

20

ultimately.

21

Q.

22
23

Wouldn't necessarily be something we would necessarily

And would that record -- here, what is in Exhibit B(1),

Okay.
MS. FOSTER-STEERS:

Your Honor, at this time, the

government would move to introduce Exhibit B(1) into evidence.

24

MR. SHARPSTEIN:

25

THE COURT:

No objection.

B(1) will be received.

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


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(Government's Exhibit B(1) admitted into evidence)

BY MS. FOSTER-STEERS:

Q.

Now --

(Discussion had off the record between counsel)

BY MS. FOSTER-STEERS:

Q.

what I just showed you.

A.

(No response)

Q.

This is a memo to you, Tim LaMacchia, from Craig Toll,

Now, Mr. LaMacchia, I am going to direct your attention to


And what is this?

10

right?

11

A.

Yes.

12

Q.

And it's dated September 3, 2008, right?

13

A.

Yes.

14

Q.

And in the first paragraph, Mr. LaMacchia, it says:

15

"I have put together some information that I hope

16

will help your new client acceptance process."

17

At this point in time, had InnoVida been accepted as a

18

client of Ernst & Young?

19

A.

20

specific memory of the timing of acceptance, but from the

21

context of the memo, I would say no.

22

Q.

23

From the context of the memo, I would say no.

Okay.

I don't have

Now, in the third paragraph, it says:

"We are in the process of implementing Microsoft

24

dynamics navigation ERP software, which will be

25

critical to bring SOX compliant and getting good data


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for the many international operations that are

inherent in our model."

Do you know what is being referred to there?

A.

Yes.

It's referring to a software platform being SOX

compliant, "SOX" is Sarbanes-Oxley.

internal control that public companies have to adhere to.

it's talking about a pending implementation or an in-process

implementation of that software platform.

Q.

It's a law regarding


So,

Did you have an understanding, Mr. LaMacchia, at this point

10

in time, what the business of InnoVida was?

11

A.

Cursory, light, a light understanding.

12

Q.

What was that understanding, Mr. LaMacchia?

13

A.

Making -- building -- producing materials to allow

14

construction of homes in remote areas, if that -- yeah.

15

Q.

16

in order to make your evaluation as to whether or not you were

17

going to accept them as a client?

18

A.

19

owners and the executive officers, and we looked at the

20

business.

21

information.

22

Q.

23

So, what information would you be requesting from InnoVida

The client acceptance, we looked at the principals, the

Then we looked at some degree of financial

Okay.
All right.

Now, on the second page of Exhibit B(1),

24

in the first full paragraph, right, is that an explanation of

25

how it is that InnoVida makes its money?

Do you see that, sir?

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A.

Yes.

It's a long paragraph.

It's a description of I

think -- let me just read it for a second.


(Pause)

3
4

A.

the cash flows of the company.

Q.

Okay.

A.

Relative to these -- these factories.

Q.

Okay.

A.

Relative to the company's factories.

10

Q.

Now, directing your attention to the next paragraph, where

11

it says:

12

Yeah, it looks like a description of the business flows or

"Obviously, there are several accounting and tax

13

issues raised by our business, and we need the

14

expertise of your firm to present them in an

15

appropriate manner that serves our shareholders (sic)

16

both now and in the future."

17

What was your understanding of that particular

18

paragraph, Mr. LaMacchia?

19

A.

20

memory of it, but I do know upfront we were -- we were -- both

21

Craig and my firm were working on two issues.

22

consolidation, whether different aspects of the business should

23

be consolidated.

24

whether revenues should be recognized for given transactions.

25

Q.

I know -- relative to the paragraph, I don't have a great

One was

And the other was revenue recognition,

Okay.
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(Discussion had off the record between counsel)

MS. FOSTER-STEERS:

Your Honor, at this time, the

government would move to introduce Exhibit B(2), pursuant to

the certification, into evidence.

(Government's Exhibit B(2) marked for identification)

MR. SHARPSTEIN:

MS. FOSTER-STEERS:

Pursuant to what?
B(2), pursuant to the

certification, Federal Rule of Evidence 902(11).


MR. SHARPSTEIN:

I understand it's certified, but

10

there's a witness on that could say it was kept in the normal

11

course.

But we don't have an objection.

12

THE COURT:

13

(Government's Exhibit B(2) admitted into evidence)

Okay.

B(2) will be received.

14

BY MS. FOSTER-STEERS:

15

Q.

16

B(2).

17

A.

I do.

18

Q.

Do you know who Lewis Carness was?

19

A.

He worked for Craig in some -- I think he might have been

20

the controller, but not positive about that.

21

Q.

All right.

22

A.

Of InnoVida.

23

Q.

Now --

24

A.

Oh, controller.

25

Q.

Here it says:

Mr. LaMacchia, I'm gonna put Exhibit B(2) here -- this is


This is now October 6, 2008.

Do you see that?

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 159 of
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LA MACCHIA - DIRECT/FOSTER-STEERS

"Here are the files again.

I think you might

have had a problem because the files are in Excel

2007."

Do you know whether or not Mr. Lewis Carness provided

information to Ernst & Young for this audit that InnoVida

wanted to get done?

A.

Yes.

Lewis sent us information periodically.

(Discussion had off the record between counsel)

MS. FOSTER-STEERS:

Your Honor, at this time, the

10

government would move to admit Exhibit B(3), pursuant to the

11

certification, into evidence.

12

(Government's Exhibit B(3) marked for identification)

13

MR. SHARPSTEIN:

14

THE COURT:

15

(Government's Exhibit B(3) admitted into evidence)

No objection.

B(3) will be received.

16

BY MS. FOSTER-STEERS:

17

Q.

18

dated October 6, 2008, sent to you, Tim LaMacchia, right?

19

A.

Yes.

20

Q.

Okay.

21

answers."

22

companies.

23

A.

Yes.

24

Q.

Now, did you have an understanding of how many subsidiaries

25

InnoVida had?

Now, Mr. LaMacchia, this is an e-mail from Lewis Carness,

And it lists -- or, rather, it says:

"Here are your

And there is information regarding several different


Do you see that?

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 160 of
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LA MACCHIA - DIRECT/FOSTER-STEERS

A.

I asked the questions -- you know, asked the question and

gotten answers to that.

levels of ownership, so it -- subsidiary has an accounting

definition to it -- or, yeah, has an accounting definition to

it.

times, yeah.

Q.

submitted that, Mr. LaMacchia?

A.

It would have come from a combination of Craig and Lewis.

10

Q.

Now, on the page ending Bate Number '0059, which is the

11

next page, which is a preceding e-mail to the one October 6,

12

2008, it says here:

I think there were many different

But I got the corporate structure from the company several

And the corporate structure that was submitted to you, who

13

"Hello Lewis, please clarify the domicile

14

(city/state/country) for each of the entities listed

15

on the consolidation spreadsheets.

16

we contact the appropriate local office associates for

17

each respective entity."

18

We want to ensure

Do you see that, sir?

19

A.

Yes.

20

Q.

Now, when we look at Bate Number ending '00058, are these

21

the answers being provided by Mr. Carness to you?

22

A.

It appears so.

23

Q.

Yes.

24

A.

Yes.

25

Q.

I can hand it to you if you want -- if you'd like.

Is that all part of the same e-mail?

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 161 of
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LA MACCHIA - DIRECT/FOSTER-STEERS

A.

No, it looks -- it's good.

Those are the responses to my

question.

Q.

that?

A.

Yes.

Q.

And it says -- it's a Cayman Island company, books and

records located in Ras al -- I can't pronounce that -- in the

UAE.

A.

I do.

10

Q.

Then InnoVida Holdings (Cayman), Cayman Island company,

11

this is designated in Canada, and it goes on to talk about it

12

being a Cayman Island company, right?

13

A.

I do.

14

Q.

Then the next one is InnoVida Holdings, Inc., Florida

15

company, books and supporting documents, located on Lincoln

16

Road in Miami Beach.

17

A.

Yes.

18

Q.

Innorez GMBH, Germany, German company, books and records in

19

the City of Marl, Germany, right?

20

A.

Yes.

21

Q.

And then it talks about InnoVida German -- (Cayman), Cayman

22

Island company, books and records located in Canada (near

23

Montreal); however, many bank records and transaction support

24

can be accessed from the Miami office.

25

A.

Now, it talks about InnoVida Holdings (Cayman).

Do you see

Do you see that?

Do you see that?

Do you see that?

Yes.
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 162 of
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LA MACCHIA - DIRECT/FOSTER-STEERS

Q.

Now, did -- or do you know whether or not Ernst & Young

reached out to these various entities in order to get any

information from these entities, sir?

A.

Only one I recall specifically would be the UAE.

Q.

And why is it that you recall that one?

A.

I just do recall reaching out to my colleagues in whatever

part of the world that was, to interact with the company's

employees or that subsidiary's employees at that location.

Q.

And with respect to the other entities, did you get

10

information from InnoVida Holdings?

11

A.

12

the Lincoln Road company, whose books and records were

13

maintained at Lincoln Road.

14

think we got information -- or asked questions and received

15

responses back from Craig and Lewis.

16

Q.

Okay.

17

A.

If I recall, a couple of them had -- maybe weren't

18

currently operating -- or at the time weren't operating

19

anymore.

20

Q.

21

to ask you just to read across.

22

tiny, Mr. LaMacchia.

23

For InnoVida Holdings, definitely.

So, that -- that was

And then for the other entities, I

Now, look for me at same exhibit, Exhibit B(3).

I'm going

And I know it's very, very

But I'll bring it in focus for you.

Reading from left to right, at the top, it says

24

"InnoVida group of companies combined balance sheets."

25

see that, sir?


FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

Do you

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 163 of
185
163
LA MACCHIA - DIRECT/FOSTER-STEERS

A.

I do.

Q.

Okay.

covers (sic)?

A.

It's as of December 31, 2006.

Q.

And then just reading across, the next box says "combined

InnoVida group of companies," right?

A.

Yes.

Q.

And it says "consolidation elimination," right?

A.

Yes.

10

Q.

Then it has "combined group 1, consolidation elimination."

11

And what is the period that these balance sheets

The next one is InnoVida (Delaware), right?

12

A.

Yes.

13

Q.

InnoVida Holdings (Cayman) Canada -- CAN, rather; InnoVida

14

Holdings (Cayman) RAK; InnoVida Germany Limited; Innorez;

15

combined group 2, consolidation elimination; the next box over

16

is InnoVida Holdings, LLC, InnoVida Holdings (Florida),

17

InnoVida GMBH -- that's the last box, right?

18

A.

Yes.

19

Q.

Now, when it talks about the combined balance sheets, what

20

is your understanding of that, sir?

21

A.

22

reflected out to the right.

23

Q.

All these entities reading from left to right, right?

24

A.

Yeah.

25

entries and all those different columns.

That's the combination of all those entities that were

And the elimination entries and consolidation

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 164 of
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164
LA MACCHIA - DIRECT/FOSTER-STEERS

Q.

All right.

And can you just tell us, Mr. LaMacchia, for

the period ending December 31, 2006, what is the cash and cash

equivalents noted here?

A.

as of December 31, 2006.

That's an "as of" figure, so it's not a period ended.

It's

It's $300,428.

THE COURT REPORTER:

THE COURT:

I'm sorry.

Mr. LaMacchia, you need to get closer to

the microphone.

A.

$300,428.

10

Q.

And the current assets of the combined group of companies

11

is how much?

12

A.

$1,475,274.

13

Q.

And if we look at the next page, what is gonna be Bate

14

Number B(3) attachment 000002, this is now the combined

15

statement of operations, right?

16

A.

(No response)

17

Q.

Right, Mr. LaMacchia?

18

A.

Yeah, combined statement of operations, yes.

19

Q.

What is a "combined statement of operations,"

20

Mr. LaMacchia?

21

A.

22

operating statements out to the right, plus all the elimination

23

and consolidation entries that are out to the right.

24

Q.

25

you dizzy with this -- are these the same companies that we saw

Again, it's the mathematical sum of the individual

And, again, are we looking at -- and I'll try not to make

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 165 of
185
165
LA MACCHIA - DIRECT/FOSTER-STEERS

on the previous page?

A.

them from the prior page.

Q.

December 31, 2006, right?

A.

ended -- so it's for the year-ended December 3, 2006, as

opposed to the balance sheets as of December 31, 2006.

Q.

I'd have to compare one by one, but I recognize several of

Now -- and for the same period of time, right, sir?

This is a statement of operations, so it's for a period

Okay.

Now, looking at the bottom of the page, where it has

10

"net income," then in brackets, there's a figure of $3,326,718.

11

What does that figure represent?

12

A.

13

2006.

14

Q.

15

of companies, right, sir?

16

A.

It represents a net loss for the year-ended December 31,

A net loss of the InnoVida group -- combined InnoVida group

Yes.

17
18

MR. SHARPSTEIN:

Your Honor, I just interpose an

objection to the relevance to this case, 2006 reports.

19

THE COURT:

I --

Overruled.

20

BY MS. FOSTER-STEERS:

21

Q.

22

now we're looking at the period ending December 31, 2007.

23

you see that, Mr. LaMacchia?

24

A.

Yes.

25

Q.

And, again, if you go from left to right, are these the

Now, we're gonna look at the same type of documents.

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

And
Do

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 166 of
185
166
LA MACCHIA - DIRECT/FOSTER-STEERS

same companies that we saw before with respect to the 2006

balance sheet and the statement of operations?

A.

would change over time.

Q.

it says "combined InnoVida group of companies," right?

We'd have to compare them.

I think, from memory, they

But we'd have to compare them.

Well, very, very simply then, just look at the top, where

Is this the balance sheets for those combined group of

companies as reflected on this particular document?

A.

Yes.

This represents -- that column represents the

10

mathematical sum of everything to the right, so all those

11

companies listed to the right, plus the elimination, plus the

12

consolidation entries.

13

Q.

And if we look at where it says "A," current --

14

MS. SMITH:

Can't see it.

15

MS. FOSTER-STEERS:

I'm sorry.

16

BY MS. FOSTER-STEERS:

17

Q.

18

equivalents," how much is reflected in that particular column?

19

A.

$837,362.

20

Q.

Okay.

21

there?

22

A.

5,251,874.

23

Q.

Again, looking at now the combined statement of operations

24

for the period ending December 31, 2007, and then just look at

25

the bottom, where it has "net income" for that period ending

Where it says "A, current assets, cash and cash

And the "current assets," how much is reflected

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 167 of
185
167
LA MACCHIA - DIRECT/FOSTER-STEERS

December 31, 2007, what is the figure represented there?

A.

It's a negative 6,575,403.

Q.

And when you say a "negative," is that translated to a loss

for --

A.

I believe so.

Q.

Of course.

A.

Yes, it was a loss.

Q.

Okay.
THE COURT:

9
10

Can you just go up a little bit on the page?

Ms. Foster-Steers, is this a good spot to

break?

11

MS. FOSTER-STEERS:

12

THE COURT:

Yes, your Honor.

All right.

Members of the jury, we're

13

going to go ahead and recess for the evening.

14

admonition not to discuss the case or allow it to be discussed

15

in your presence.

16

at 9:30.

17
18

Remember my

And I'm gonna ask you to come back tomorrow

So, have a nice evening.

We'll see you back tomorrow

at 9:30.

19

(The jury exited the courtroom)

20

THE WITNESS:

21

THE COURT:

22

During the break in your testimony, Mr. LaMacchia,

23

Your Honor, am I to leave?

I'm gonna explain to you in a second.

you're not allowed to discuss your testimony with anyone.

24

Do you understand?

25

THE WITNESS:

Yes.

FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER


(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 168 of
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168

THE COURT:

And we'll see you back tomorrow at 9:30.

THE WITNESS:

THE COURT:

Okay.

And if there's nothing else to come before

the Court, we'll be in recess in this case until 9:30, on other

matters until five o'clock.

COURTROOM SECURITY OFFICER:

(The Judge exited the courtroom)

(Proceedings concluded at 4:53 p.m.)

All rise.

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 169 of
185
169

INDEX OF WITNESSES

GOVERNMENT'S WITNESS

Alfred Smith
Direct by Ms. Foster-Steers
Cross by Mr. Sharpstein
Redirect by Ms. Foster-Steers
Recross by Mr. Sharpstein

3
22
42
46

Mark Hobson
Direct by Ms. Foster-Steers

48

Gabriela Fudally
Direct by Ms. Selmore
Cross by Mr. Sharpstein
Redirect by Ms. Selmore

58
64
74

4
5
6

PAGE

7
8
9
10
11

Cameron Alford
Direct by Ms. Foster-Steers
Cross by Mr. Sharpstein
Redirect by Ms. Foster-Steers

77
110
135

Tim LaMacchia
Direct by Ms. Foster-Steers

142

12
13
14

15
16
17
18
19
20
21
22
23
24
25
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 170 of
185
170

INDEX OF EXHIBITS

GOVERNMENT'S EXHIBITS:

MARKED

RECEIVED

K(1)(j)

64

64

B(1)

153

155

B(2)

158

158

B(3)

159

159

8
9
10
11
12
13
14
15
16
17
18
19

C E R T I F I C A T E

20

I certify that the foregoing is a correct transcript from

21

the record of proceedings in the above-entitled matter.

22
23
24

/S/Francine C. Salopek
Francine C. Salopek, RMR-CRR
Official Court Reporter

9-19-13
Date

25
FRANCINE C. SALOPEK, OFFICIAL COURT REPORTER
(954)769-5657

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 171 of171
185
2009 [26] 4/6 4/13 5/2 7/10 7/11 7/21
8/18 11/1 26/7 31/2 44/14 68/12 74/3
$1,475,274 [1] 164/12
/S/Francine [1] 170/23
80/8 80/10 80/11 81/7 88/14 89/15
$10 [5] 3/13 99/23 99/25 100/13 119/19
89/20 91/10 91/23 110/11 115/8 115/19
$10 million [5] 3/13 99/23 99/25 100/13 0
150/1
000002 [1] 164/14
119/19
2010 [64]
0003031 [1] 89/8
$15,605,029 [1] 11/3
2010081100051248 [2] 61/11 62/15
001788 [1] 98/13
$2.5 [3] 61/14 63/4 63/8
2011 [10] 38/23 44/20 58/23 59/17 73/7
06 [1] 69/16
$2.5 million [3] 61/14 63/4 63/8
73/23 80/8 114/11 115/4 132/21
08 [2] 70/18 72/11
$20,000 [1] 116/4
2012 [1] 46/10
09 [5] 68/22 69/7 70/4 70/10 70/25
$200,000,000 [1] 34/11
2013 [3] 1/6 2/1 76/1
$210,000 [1] 127/1
205F [1] 1/22
1
$3,326,718 [1] 165/10
20th [1] 70/5
1-7-2009 [1] 68/12
$3.3 [1] 33/12
21 [5] 71/13 71/13 71/14 117/17 135/24
10 [3] 71/3 71/16 72/18
$3.3 million [1] 33/12
21398744 [1] 61/22
10:30 [1] 3/3
$30,000,000 [1] 35/9
21st [3] 119/5 120/4 120/11
10:47 a.m [1] 47/20
$300,428 [2] 164/5 164/9
22 [5] 11/12 11/17 13/17 98/9 169/4
11 [10] 7/12 8/16 9/16 10/24 36/3 59/17 23rd [1] 36/3
$37,044,439 [1] 8/21
75/4 97/11 141/22 158/8
$39,296,232 [1] 8/19
25th [1] 1/19
11-9-2009 [1] 74/3
$40,000,000 [1] 36/10
26 [4] 15/2 15/9 120/7 126/3
110 [1] 169/11
$5,903,169 [1] 16/8
26th [1] 135/25
11:10 a.m [1] 47/20
$500,000 [3] 44/10 62/20 75/3
27 [2] 59/3 141/23
11th [1] 61/24
$6,615,640 [2] 11/6 89/22
27th [1] 58/19
12 years [1] 49/19
$6.7 [1] 56/23
28 [5] 3/23 15/10 36/6 86/15 89/3
12-20 [1] 70/19
$6.7 million [1] 56/23
28th [2] 120/17 120/20
12-20901-CR-WPD [1] 1/4
$70,000 [1] 114/7
299 [1] 1/22
12-9-08 [1] 70/18
$837,362 [1] 166/19
2:03 P.M [1] 76/1
12:00 p.m [1] 75/25
$9,574,152 [1] 89/14
3
13 [2] 95/16 170/23
'
135 [1] 169/11
3-10-2011 [2] 73/7 73/23
14 [2] 58/14 73/1
'000429 [1] 55/13
3.2 [1] 20/8
142 [1] 169/13
'00058 [1] 160/20
3.3 million [3] 20/9 103/18 114/1
15 [5] 66/14 73/1 74/3 134/13 134/16
'0059 [1] 160/10
30 [12] 3/24 4/6 4/13 5/2 16/5 55/20
15 minutes [3] 47/14 47/18 134/5
'01 [1] 110/16
88/14 89/15 89/20 91/10 91/23 146/12
15-minute [2] 47/11 134/2
'0402 [1] 53/19
30 years [1] 22/23
153 [1] 170/4
'0410 [1] 55/8
301 [1] 4/11
155 [1] 170/4
'0429 [1] 140/23
303 [1] 4/10
158 [2] 170/5 170/5
'0430 [1] 55/19
30th [2] 121/6 124/8
159 [2] 170/6 170/6
'0431 [1] 55/22
31 [28] 4/6 5/2 7/21 7/21 8/17 8/20 11/1
16 [2] 55/22 71/13
'0432 [1] 55/25
11/1 11/4 11/14 11/23 13/19 13/22 31/2
17 [4] 71/13 71/14 72/8 72/18
'0484 [1] 108/2
43/8 88/15 89/22 98/10 98/17 163/4
18 [7] 53/3 53/19 54/11 68/8 68/20
'07 [1] 70/25
164/2 164/5 165/5 165/8 165/12 165/22
108/2 139/8
'0750 [1] 95/17
166/24 167/1
1910 [2] 24/16 24/17
'08 [2] 72/11 72/15
32 years [2] 22/8 22/10
1985 [1] 144/20
'09 [4] 35/20 36/15 115/24 119/25
33131 [1] 1/20
1986 [1] 144/10
'1248 [2] 62/23 63/4
33132 [1] 1/16
1994 [1] 49/8
'1648 [1] 91/5
33301 [1] 1/23
1998 [1] 145/14
'1649 [1] 37/16
35 million [1] 124/1
1999 [2] 49/21 52/17
'1670 [1] 101/2
35 million-plus [1] 34/19
'1680 [1] 40/15
3:34 p.m [1] 134/18
2
'1788 [1] 13/17
3:56 p.m [1] 134/18
2,800 [1] 139/21
'2280 [1] 15/15
3rd [1] 1/19
2-9-09 [5] 68/22 69/7 70/4 70/10 70/25
'2283 [1] 16/5
20 [9] 60/8 69/17 70/1 70/5 70/19 71/25 4
'3029 [2] 87/19 88/9
72/3 72/12 146/11
'3031 [1] 35/6
40 [1] 36/9
2000 [1] 52/17
'3055 [2] 7/12 9/17
40,000 [1] 36/9
2001 [1] 78/8
'3057 [2] 10/24 36/8
42 [4] 59/13 62/5 74/21 169/4
2002 [3] 143/9 145/4 150/21
'4270 [1] 71/15
44 [3] 132/20 132/20 133/2
2002-2003 [1] 150/24
'44 [9] 67/7 67/12 67/24 70/11 73/3
46 [1] 169/5
2003 [2] 150/23 150/24
73/5 73/8 73/24 73/25
48 [1] 169/6
2006 [9] 163/4 164/2 164/5 165/5 165/7 4:30 [1] 3/3
'70 [2] 68/12 72/4
165/8 165/13 165/18 166/1
'86 [1] 144/22
4:53 p.m [1] 168/8
2007 [11] 77/23 78/25 79/1 110/13
'8744 [2] 60/25 75/4
4th [2] 1/16 53/25
110/14 111/12 113/14 159/3 165/22
'89 [1] 68/13
5
166/24 167/1
'91 [2] 69/21 70/21
4/6
5/2
7/11
7/21
8/20
11/1
2008
[16]
5,251,874 [1] 166/22
'94 [1] 49/7
11/4 88/16 89/22 149/25 150/3 152/15 5-20-10 [3] 71/3 71/16 72/18
'the [1] 96/2
155/12 158/16 159/18 160/12
5.05 [1] 96/11
2008-2009 [1] 150/1
50 percent [1] 87/16

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 172 of172
185
accumulation [1] 151/6
accurate [7] 19/16 21/2 21/15 30/4
500,000 [2] 62/2 62/19
88/18 93/2 94/10
5657 [1] 1/23
accurately [1] 91/20
58 [1] 169/8
acknowledges [1] 120/9
acknowledgments [1] 37/18
6
acquired [1] 108/11
6,575,403 [1] 167/2
across [2] 162/21 163/5
6-3-08 [1] 72/11
action [1] 37/20
6.05 [1] 5/18
add [1] 142/13
6.06 [9] 6/14 6/17 6/22 12/6 16/25
added [1] 34/7
91/13 94/17 94/23 133/5
adding [2] 33/22 149/7
6.08 [1] 44/2
addition [2] 9/3 9/5
64 [3] 169/8 170/3 170/3
addressed [1] 100/24
adhere [1] 156/6
7
admit [1] 159/10
7-31-2010 [1] 61/19
admitted [7] 3/21 49/7 53/2 64/9 155/1
70,000 [3] 114/17 114/17 114/18
158/13 159/15
74 [1] 169/9
admonition [7] 2/22 47/11 48/10 76/22
769-5657 [1] 1/23
134/2 135/14 167/14
77 [1] 169/10
advice [10] 59/18 59/22 60/5 61/5 61/9
7A [3] 90/11 91/5 101/3
62/4 62/11 62/15 62/23 63/8
affairs
[5] 77/25 79/15 79/16 80/16
8
80/17
8-11-2010 [1] 74/22
affected [1] 39/19
8-31-2010 [1] 61/19
affidavit [1] 52/8
80 [1] 140/16
afford [1] 127/6
afternoon [6] 2/11 2/12 64/12 77/15
9
110/4 110/7
9-19-13 [1] 170/23
afterwards [1] 6/11
9.06 [1] 100/24
agencies [1] 151/6
90 [2] 132/1 133/6
agency [3] 28/22 79/11 140/17
90 days [3] 6/17 94/18 95/6
agent [1] 114/14
902 [2] 141/22 158/8
agents [1] 51/3
954 [1] 1/23
aggregate [1] 44/9
99 [1] 1/16
agree [1] 23/18
9:30 [7] 2/13 2/25 3/1 167/16 167/18
agreement [56]
168/1 168/4
agreement' [1] 96/2
9:31 [2] 1/7 2/1
agreements [6] 96/4 101/4 108/16
109/4 136/8 138/1
A
agrees [1] 120/9
A-L-F-O-R-D [1] 77/12
aid [1] 139/15
A-L-L-Y [1] 57/25
Akerman [1] 1/19
a.m [4] 1/7 2/1 47/20 47/20
al [4] 50/23 52/12 126/7 161/7
ABA [1] 49/14
alerted [1] 46/23
ability [4] 19/23 99/1 104/25 108/18
Alford [48]
above [5] 100/5 138/4 138/6 146/6
Alfred [5] 50/11 53/22 91/3 93/17 169/3
170/21
allegations [2] 46/17 46/17
above-entitled [1] 170/21
alleged [1] 46/15
absolutely [4] 59/2 93/8 93/10 113/21 allow [12] 2/23 5/12 25/16 45/25 45/25
acceleration [1] 138/11
47/12 48/11 76/23 134/3 135/15 156/13
accept [2] 32/12 156/17
167/14
acceptance [3] 155/16 155/20 156/18 allowed [3] 131/13 134/9 167/23
accepted [3] 41/15 143/18 155/17
almost [4] 28/2 49/16 49/18 124/9
access [4] 147/10 147/12 147/13
Alvarez [3] 69/23 71/7 71/20
147/14
Amarilis [11] 67/17 68/17 68/25 69/22
accessed [1] 161/24
70/13 70/22 71/6 71/20 73/6 118/5
accordance [5] 5/21 17/6 18/17 19/5
118/7
41/15
amended [3] 96/2 104/8 138/16
according [10] 5/5 5/14 6/2 12/6 18/1 amendments [1] 80/1
18/24 19/2 20/11 63/5 140/22
AMERICA [1] 1/5
account [39]
American [1] 29/1
accountant [4] 144/7 145/2 145/7
amount [18] 34/23 35/2 40/11 61/12
145/8
62/14 62/17 62/20 62/23 63/8 87/4
accountant's [1] 125/6
99/22 104/3 104/7 104/11 104/13 138/4
accounting [8] 41/15 43/14 143/18
138/6 148/8
144/16 147/13 157/12 160/3 160/4
amounts [1] 62/10
accounts [6] 65/25 66/2 66/4 68/1 68/3 analyze [1] 87/8
68/22
Andersen [10] 144/22 145/3 145/8

145/9 145/11 145/13 145/15 146/15


146/16 151/23
angle [1] 80/21
annual [1] 92/22
answer [6] 7/25 8/1 17/2 119/10 121/7
123/15
answers [3] 159/21 160/2 160/21
anticipated [1] 130/4
anxious [1] 37/3
anymore [1] 162/19
apologize [4] 61/16 63/21 71/14 72/21
apparent [1] 131/9
APPEARANCES [1] 1/14
application [1] 99/9
applied [1] 17/15
approach [5] 3/17 53/5 65/5 141/25
153/17
approached [2] 45/7 84/9
approval [9] 27/11 85/1 85/24 99/17
99/17 100/2 100/5 100/6 100/12
approve [1] 27/18
approved [6] 27/6 36/21 99/4 99/18
99/20 140/2
approves [2] 99/25 100/10
April [4] 36/3 36/4 36/6 55/20
April 23rd [1] 36/3
April 30 [1] 55/20
Arango [1] 1/18
arbitral [3] 37/20 44/6 133/12
arbitration [1] 37/21
area [2] 106/11 140/16
areas [1] 156/14
Ari [1] 1/18
arose [4] 38/6 39/13 126/14 127/19
arrangements [2] 78/22 107/18
arrived [1] 113/14
Arthur [10] 144/22 145/3 145/7 145/8
145/11 145/12 145/15 146/15 146/15
151/23
Article [1] 96/14
Article III [1] 96/14
Artie [2] 75/2 75/3
aspect [1] 87/2
aspects [2] 125/16 157/22
asserted [1] 25/17
assessments [1] 125/17
asset [1] 35/2
assets [9] 34/18 35/3 85/18 87/3 87/5
124/6 164/10 166/17 166/20
assigned [14] 60/4 60/6 80/11 80/12
80/17 80/23 81/7 81/21 106/20 108/15
108/21 115/8 115/17 115/18
assignments [1] 108/10
assist [1] 113/16
assistant [5] 1/15 77/25 78/2 79/7
113/15
associates [1] 160/16
assume [1] 46/4
assumed [7] 8/25 12/24 13/5 18/19
28/21 29/5 150/15
Assuming [2] 12/23 120/11
attach [1] 121/5
attached [9] 11/25 15/14 29/12 54/4
54/10 54/17 86/20 121/10 142/15
attaching [1] 3/23
attachment [1] 164/14
attachments [2] 54/11 54/15
attempt [1] 19/21
attempting [1] 149/24

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 173 of173
185

A
attorney [1] 80/16
attorneys [2] 1/15 90/22
audit [32] 32/20 43/6 103/11 126/19
143/12 143/14 143/15 143/16 143/20
143/21 143/22 145/24 146/14 146/17
146/21 146/24 146/25 147/18 148/2
149/2 149/8 149/10 149/11 149/16
149/24 150/5 151/23 152/3 152/18
153/4 153/9 159/5
audited [34] 29/25 30/6 30/12 30/19
30/19 30/23 32/18 42/22 43/1 43/3
92/23 100/21 101/11 101/12 101/17
101/19 102/1 102/4 102/7 102/12
102/14 102/17 102/23 103/2 103/13
123/1 126/14 126/16 127/5 127/6
127/20 133/7 138/13 138/17
auditing [7] 102/5 143/4 143/5 145/19
145/21 149/24 150/2
auditors [2] 43/6 92/23
audits [1] 145/2
August [14] 31/2 43/8 50/22 53/25
55/11 55/24 56/6 56/17 59/17 61/3
61/24 75/4 77/23 133/14
August 11 [2] 59/17 75/4
August 11th [1] 61/24
August 2 [1] 56/17
August 3 [1] 55/24
August 31 [2] 31/2 43/8
August 4 [2] 55/11 56/6
August 4th [1] 53/25
August, [3] 50/13 51/11 51/23
August, 2010 [3] 50/13 51/11 51/23
August-11-2010 [1] 61/3
authorization [1] 68/21
authorized [10] 66/2 66/25 67/16 67/22
67/23 69/7 69/20 69/25 71/23 71/24
authorizes [1] 66/18
Avenue [1] 1/19
awarded [1] 140/14
aware [20] 18/15 29/24 39/24 40/5
44/13 82/9 100/22 101/11 104/18
107/10 109/19 114/5 114/25 116/23
121/11 121/12 121/21 126/15 130/24
139/3

B
Bachelor [1] 144/16
background [2] 151/17 154/4
backing [2] 116/21 116/25
balance [30] 7/10 9/1 9/16 9/23 11/13
11/22 12/11 12/16 12/17 12/19 13/4
13/11 15/3 15/14 15/18 15/20 16/18
17/18 33/16 33/22 35/1 98/9 122/2
122/5 162/24 163/2 163/19 165/8 166/2
166/7
bank [22] 27/17 34/22 42/5 55/15 59/4
59/10 59/15 60/21 61/17 61/17 62/18
63/1 63/6 65/11 65/13 65/14 65/15
66/17 85/13 112/6 113/8 161/23
banks [4] 78/21 111/9 113/6 113/7
bar [2] 49/7 49/15
basic [1] 85/3
basis [7] 11/9 29/14 80/18 92/21 92/22
130/13 143/17
Bate [25] 7/12 9/17 10/24 13/17 15/15
16/4 40/15 53/19 55/8 55/13 55/19
55/22 55/24 87/19 88/8 89/8 91/4 95/16

98/13 101/2 108/2 140/23 160/10


160/20 164/13
Bates [2] 35/6 66/10
Beach [1] 161/16
began [7] 81/24 144/22 145/2 145/5
145/16 145/18 149/24
begin [2] 49/20 80/9
beginning [5] 79/20 82/4 114/1 115/7
147/1
behind [5] 30/20 70/3 113/9 113/17
125/10
Belgium [1] 49/12
belief [1] 30/15
believe [49]
believed [1] 24/7
below [2] 53/24 96/10
bench [1] 142/2
benefit [1] 69/13
besides [1] 53/16
beyond [3] 45/24 100/11 151/20
bid [1] 80/19
bigger [2] 61/21 123/1
biggest [1] 110/25
Bill [2] 25/4 118/13
blue [1] 83/16
Blvd [1] 1/22
board [1] 100/12
body [1] 56/9
bono [1] 49/13
books [5] 161/6 161/15 161/18 161/22
162/12
borrower [13] 19/21 44/5 85/20 86/2
86/24 95/23 95/25 96/4 96/23 99/7
99/12 99/20 120/9
borrowers [2] 97/3 101/6
bosses [1] 50/12
bottom [8] 11/1 66/10 66/11 89/12
124/7 124/9 165/9 166/25
bought [4] 58/25 105/11 105/12 106/18
Bowen [9] 22/8 24/14 49/18 49/20
52/15 90/22 91/2 126/4 126/7
box [5] 26/9 26/17 163/5 163/15 163/17
boxes [1] 63/17
brackets [1] 165/10
branch [1] 58/17
Brazil [1] 49/16
break [6] 3/2 112/1 133/24 134/8
167/10 167/22
Brito [1] 56/10
Broward [2] 1/22 58/14
budget [2] 6/21 94/22
build [18] 26/13 39/23 40/3 40/6 40/10
40/11 104/16 106/17 109/14 116/17
118/15 119/3 125/21 128/12 128/17
131/5 131/23 140/15
building [13] 26/12 41/2 83/22 83/24
115/21 117/4 124/19 128/4 129/10
130/11 132/1 138/20 156/13
buildings [1] 81/20
built [10] 106/19 124/21 128/22 129/1
129/4 129/6 129/10 130/25 131/23
141/3
bungalows [1] 129/11
business [34] 26/3 26/5 26/6 26/7
26/14 26/25 27/1 28/25 29/2 29/2 49/5
49/25 81/14 81/16 81/18 82/6 90/23
90/25 90/25 112/24 143/3 147/2 147/11
147/15 151/5 151/21 152/8 154/10
154/15 156/10 156/20 157/4 157/13

157/22
button [1] 60/19
buy [2] 40/2 118/15

C
call [20] 25/23 25/25 48/13 51/25 55/2
57/16 57/17 60/14 66/7 77/2 87/25
100/9 107/8 123/12 123/17 123/18
125/18 141/12 150/4 150/7
called [6] 4/10 50/23 80/3 115/4 150/16
151/2
calls [7] 25/10 25/13 48/14 77/4 94/16
100/23 141/14
Cameron [13] 3/12 6/4 18/23 23/4
28/16 53/11 53/13 53/20 57/6 77/4 77/7
77/11 169/10
Canada [3] 161/11 161/22 163/13
card [8] 66/17 67/12 70/11 70/21 71/19
72/11 73/22 85/13
cards [4] 66/1 70/3 72/2 72/3
cargo [2] 119/2 119/2
Caribbean [8] 109/8 109/14 109/14
128/21 130/2 138/21 141/1 141/3
Carness [4] 158/18 159/4 159/17
160/21
cash [14] 8/17 8/17 34/18 34/19 34/23
87/4 87/4 123/25 123/25 157/5 164/2
164/2 166/17 166/17
caused [1] 96/7
Cayman [10] 95/22 161/3 161/6 161/10
161/10 161/12 161/21 161/21 163/13
163/14
cc [1] 120/22
cc'd [1] 11/19
celebrities [1] 117/11
centered [1] 104/12
CEO [2] 83/8 100/10
certificate [3] 6/24 95/1 96/20
certification [5] 96/25 97/6 158/4 158/8
159/11
certifications [2] 95/11 96/24
certified [5] 6/22 94/24 95/9 144/7
158/9
certify [3] 95/23 96/12 170/20
certifying [2] 94/3 97/6
CFO [5] 52/16 83/9 95/10 150/17
152/11
chaired [1] 100/9
charge [1] 58/14
checked [1] 92/22
checks [1] 66/21
chief [5] 6/22 94/24 95/20 151/9 153/16
CHS [5] 52/16 151/19 152/6 152/8
152/10
CHS Electronics [1] 52/16
circumstance [1] 102/13
circumstances [2] 89/1 102/10
city [2] 160/14 161/19
city/state/country [1] 160/14
claims [1] 44/8
clarify [3] 29/12 146/18 160/13
Clark [2] 116/16 118/25
Claudio [15] 52/1 55/3 55/6 56/2 56/7
67/17 68/16 68/25 69/21 70/13 70/22
71/6 71/19 72/15 120/9
clause [1] 23/21
clauses [1] 23/10
clear [2] 5/18 74/7
client [12] 22/19 23/7 24/12 24/23 25/7

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 174 of174
185

C
client... [7] 25/20 147/8 148/19 155/16
155/18 156/17 156/18
clients [1] 14/5
Clinton [9] 25/4 25/6 116/16 116/21
116/23 117/8 118/14 118/22 128/15
Clintons [1] 118/11
close [3] 37/3 62/7 141/18
closely [1] 67/15
closer [2] 35/14 164/7
closing [2] 19/20 96/20
colleagues [1] 162/6
collective [1] 90/23
college [1] 146/2
column [2] 166/9 166/18
columns [1] 163/25
combination [5] 8/25 33/15 33/15
160/9 163/21
combined [24] 10/23 10/25 11/8 12/15
12/17 13/18 13/21 89/9 98/14 122/2
122/5 162/24 163/5 163/10 163/15
163/19 164/10 164/14 164/18 164/19
165/14 166/6 166/7 166/23
comfortable [1] 104/13
commencement [2] 44/6 133/12
commercial [5] 22/13 27/14 29/1 31/16
42/5
commitment [14] 85/2 99/19 119/23
120/5 120/21 121/4 126/2 131/8 135/23
136/2 136/4 136/7 136/12 136/14
committed [1] 120/8
committee [1] 100/9
common [1] 140/16
commonly [1] 60/14
communicate [2] 32/11 52/21
communicated [4] 20/5 20/6 28/2
28/12
communication [1] 129/18
communications [2] 127/12 127/13
community [1] 130/18
companies [32] 12/16 12/18 22/16
29/1 29/1 29/14 30/25 33/15 33/16
33/18 33/23 50/1 92/16 92/23 112/10
121/21 121/24 122/2 122/4 122/8
149/15 156/6 159/22 162/24 163/6
164/10 164/25 165/15 166/1 166/6
166/8 166/11
company [125]
company A [2] 34/8 34/10
company B [2] 34/9 34/10
company's [5] 18/13 91/9 103/11 157/9
162/7
compare [3] 165/2 166/3 166/4
comparison [3] 6/20 88/15 94/21
competent [3] 28/22 29/5 32/6
complain [1] 23/13
complete [12] 4/19 5/1 6/23 21/15
88/18 88/24 88/25 91/13 94/9 94/25
95/10 95/13
completed [1] 32/19
compliant [3] 18/12 155/25 156/5
complicated [1] 78/20
complied [6] 17/23 19/7 19/12 19/14
19/22 23/21
complies [1] 41/23
comply [10] 16/25 17/3 17/10 18/4 18/8
32/2 32/8 41/19 58/15 143/18
components [1] 9/23

comport [3] 24/8 31/21 31/23


composite [4] 40/20 81/10 81/18 84/1
computer [4] 1/25 60/18 60/19 152/9
concede [4] 2/18 48/6 76/18 135/10
concerned [1] 125/12
concluded [1] 168/8
conclusions [2] 147/6 148/23
condition [21] 4/20 18/15 85/19 86/7
87/3 87/7 87/23 88/11 91/6 91/14 91/20
91/22 92/2 94/11 96/17 96/22 98/6 98/7
99/15 136/24 137/1
conditions [9] 18/18 19/19 19/20 19/22
19/24 87/12 127/24 136/5 136/20
conduct [11] 46/15 62/13 143/20
143/21 143/24 143/25 146/16 146/21
147/5 148/12 148/22
conducted [1] 149/12
conducting [7] 145/2 145/24 147/4
147/5 150/5 152/17 153/9
conference [4] 51/25 55/2 83/23 117/4
confess [1] 81/2
confusing [1] 16/1
connection [5] 51/16 96/6 100/20
107/17 139/7
connections [1] 118/10
consist [1] 146/25
consistent [1] 97/14
consolidated [10] 3/24 6/19 11/13
11/22 15/14 94/20 95/8 121/5 133/7
157/23
consolidation [8] 157/22 160/15 163/8
163/10 163/15 163/24 164/23 166/12
constant [1] 149/5
constitute [1] 96/18
constituted [1] 20/9
construction [9] 40/18 81/9 81/19
103/23 104/14 105/8 106/6 106/16
156/14
consultant [2] 58/12 58/13
contact [3] 28/15 150/9 160/16
contacted [1] 152/15
contain [5] 18/15 20/12 21/13 62/3
93/2
contained [4] 20/1 21/1 21/2 96/4
contains [1] 19/20
contents [1] 125/25
context [3] 36/4 155/19 155/21
continued [2] 3/8 84/22
continuing [1] 136/6
contract [29] 22/20 23/7 23/11 23/18
23/21 24/3 24/8 27/7 27/12 27/19 29/16
31/21 37/15 37/16 38/7 39/10 40/15
41/19 41/23 108/6 108/12 108/13
108/21 108/24 109/1 139/25 140/15
140/22 140/24
contracts [2] 106/14 107/18
control [1] 156/6
controller [2] 158/20 158/24
conversation [2] 38/22 118/17
conversations [3] 34/14 39/1 90/23
converted [3] 58/23 58/24 58/25
coordinating [1] 102/18
copied [3] 15/12 15/17 53/22
copy [2] 38/15 95/7
corner [3] 31/8 56/4 66/11
corporate [5] 49/23 66/5 78/21 160/5
160/7
Corporation [3] 77/19 90/13 96/1
corrected [1] 54/15

corresponded [2] 51/9 51/24


counsel [28] 2/4 2/18 3/16 15/7 20/22
21/23 42/15 47/23 48/6 63/12 63/16
63/22 65/9 72/23 76/5 76/18 78/1 78/2
79/7 96/6 107/24 109/23 113/16 134/22
135/10 155/4 158/1 159/8
countries [1] 105/2
country [2] 81/22 160/14
County [1] 58/14
court [17] 1/1 1/21 1/21 1/22 2/5 22/2
47/18 47/24 64/13 75/22 76/6 76/12
110/5 134/16 134/23 168/4 170/24
courtroom [19] 2/2 2/17 47/16 47/19
47/21 48/5 75/20 75/24 76/2 76/17 77/5
83/12 134/7 134/17 134/19 135/4 135/9
167/19 168/7
covenant [1] 133/5
covenants [2] 96/3 109/4
cover [1] 112/3
covers [1] 163/3
CPA [6] 30/19 143/4 144/7 144/9
144/22 151/23
CR [1] 1/4
CRAIG [37]
credit [12] 82/3 82/4 84/24 85/4 85/8
85/10 85/13 85/23 99/16 100/4 100/6
100/8
critical [4] 82/20 82/21 82/21 155/25
Cross [10] 22/1 22/3 57/9 63/11 64/10
110/1 110/2 169/4 169/8 169/11
Cross-examination [7] 22/1 22/3 57/9
63/11 64/10 110/1 110/2
CRR [2] 1/21 170/24
Cruise [4] 109/8 138/21 141/1 141/4
currency [1] 112/4
Cursory [1] 156/11
custodian [1] 64/20
customers [1] 147/15
cut [1] 65/23
cycle [1] 79/25

D
D.C [5] 49/14 78/11 78/17 110/19
110/20
data [1] 155/25
date [28] 30/6 31/1 31/5 43/8 43/10
55/11 55/12 61/1 61/23 68/11 69/5
69/16 70/10 73/23 88/13 89/25 90/1
90/6 90/9 96/15 96/16 96/19 102/15
102/24 114/12 115/1 120/11 170/24
dated [16] 3/23 11/18 15/9 55/20 55/24
56/6 68/22 71/16 73/22 74/3 86/15
91/10 96/1 135/24 155/12 159/18
dates [3] 39/2 44/22 70/4
David [1] 57/25
deadlines [1] 149/16
dealings [2] 14/5 25/8
dealt [8] 6/4 52/16 55/1 112/21 126/7
127/24 128/4 151/14
debt [1] 99/2
decades [1] 22/14
December [28] 4/6 5/2 7/21 7/21 8/17
8/20 11/1 11/1 11/4 46/9 80/11 88/15
89/22 115/8 115/19 115/24 116/2
119/25 163/4 164/2 164/5 165/5 165/7
165/8 165/12 165/22 166/24 167/1
December 3 [1] 165/7
December 31 [20] 4/6 5/2 7/21 7/21
8/17 8/20 11/1 11/1 11/4 88/15 89/22

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185

D
December 31... [9] 163/4 164/2 164/5
165/5 165/8 165/12 165/22 166/24
167/1
decide [1] 90/24
decided [1] 42/12
decides [1] 23/20
decision [2] 18/19 87/11
decisions [2] 85/24 125/17
dedicated [1] 40/20
deemed [1] 19/23
default [18] 38/13 38/13 44/2 96/16
96/19 115/5 132/5 132/6 132/9 132/11
132/15 133/2 133/4 137/13 137/16
138/8 138/11 138/14
defaulted [3] 133/15 133/17 137/17
defaults [2] 109/4 133/19
Defendant [2] 1/9 1/17
definition [11] 17/4 31/22 39/21 41/13
127/23 130/6 130/8 131/13 138/25
160/4 160/4
degree [4] 144/11 144/15 144/19
156/20
degrees [1] 144/17
Delaware [1] 163/11
delay [1] 43/5
delayed [3] 42/21 43/1 43/4
deleted [1] 34/8
deliver [2] 133/6 138/15
delivery [2] 100/21 101/10
Deloitte [3] 151/18 151/22 151/25
department [3] 49/23 77/25 81/3
depend [1] 87/16
depending [2] 106/10 146/10
depends [1] 146/10
deploy [2] 105/21 107/7
deployment [1] 40/21
depositor [1] 68/21
depositors [2] 67/16 71/23
deposits [2] 74/8 74/10
derivative [3] 111/22 112/19 113/4
derivatives [1] 111/20
described [2] 26/4 153/1
describing [1] 150/4
description [3] 9/23 157/1 157/4
design [1] 148/12
designated [1] 161/11
designing [2] 147/2 147/3
detailed [2] 145/24 147/12
details [2] 26/23 38/22
determine [5] 62/14 85/10 113/18
147/22 148/7
determined [2] 148/10 148/13
determining [3] 113/22 148/6 153/8
develop [3] 143/23 148/4 148/8
developing [3] 105/2 147/3 148/5
development [3] 40/17 79/12 80/21
Devine [1] 49/2
difference [1] 118/19
difficult [1] 40/2
difficulties [1] 39/14
difficulty [1] 39/25
diligence [7] 79/21 82/1 84/8 113/3
113/6 115/16 136/6
Dimitrouleas [1] 1/11
direct [20] 3/8 21/5 44/1 48/22 58/3
61/15 61/16 77/13 80/2 86/14 100/15
119/14 142/21 149/18 155/6 169/3

169/6 169/8 169/10 169/13


directed [2] 119/8 152/20
directing [3] 74/21 91/4 157/10
direction [1] 62/13
directly [6] 6/16 59/24 108/19 118/14
127/12 151/10
director [1] 100/3
directors [1] 100/12
disaster [1] 116/12
disbursed [2] 102/8 140/21
disbursement [18] 32/17 32/18 32/25
33/11 51/20 52/3 52/4 52/9 56/18 56/21
96/23 99/21 103/16 105/13 136/20
136/24 139/7 140/21
disbursements [1] 107/17
disburses [1] 137/2
disclose [1] 20/17
disclosure [12] 9/22 10/4 12/13 17/7
18/7 19/9 20/1 20/13 20/16 21/12 31/12
31/17
disclosures [6] 9/21 12/10 20/25 97/20
100/18 101/8
discover [1] 26/2
discovered [1] 62/22
discuss [9] 2/23 47/12 48/11 76/23
134/3 134/9 135/15 167/14 167/23
discussed [11] 2/23 41/6 47/12 48/11
67/10 76/23 93/17 116/8 134/3 135/15
167/14
discussing [1] 115/21
discussion [23] 3/16 15/7 20/22 21/23
39/6 39/22 41/1 42/15 45/3 63/12 63/16
63/22 65/9 72/23 104/10 104/11 107/24
109/23 118/10 147/11 155/4 158/1
159/8
discussions [4] 16/21 24/1 38/16
38/18
dissimilar [1] 85/12
distinguish [1] 153/7
distribute [1] 126/24
distribution [1] 152/9
DISTRICT [4] 1/1 1/2 1/12 1/22
division [2] 1/3 49/22
dizzy [1] 164/25
document [31] 7/15 11/15 11/24 13/6
14/20 16/12 18/13 19/4 55/12 59/6
59/12 60/7 60/9 61/13 62/24 63/1 63/5
63/18 87/6 88/9 88/11 89/2 89/2 89/3
91/19 95/17 98/11 98/15 107/22 108/3
166/8
documentation [4] 51/1 51/18 79/24
109/5
documents [25] 14/9 19/21 52/2 53/4
53/10 54/4 54/9 55/6 56/20 57/2 57/3
63/18 64/22 64/25 65/18 65/19 65/20
69/10 86/1 86/20 86/23 113/18 130/4
161/15 165/21
dollar [1] 124/10
dollars [5] 34/9 34/10 34/19 112/5
112/7
domain [6] 104/19 105/4 105/15
105/23 106/10 128/7
domicile [1] 160/13
donates [1] 106/12
double [1] 34/12
double-counting [1] 34/12
draw [2] 100/16 148/23
drawing [1] 147/6
DRC [1] 140/15

DRC Emergency [1] 140/15


dwellings [1] 140/16
dynamics [1] 155/24

E
e-mail [38]
early [2] 3/2 25/25
earn [1] 112/5
earned [1] 89/20
earthquake [12] 82/10 82/17 82/18
82/21 82/22 82/23 84/17 115/22 116/11
119/22 119/24 128/3
easy [2] 131/9 142/15
Ed [2] 25/1 25/3
efficient [1] 40/22
Elba [10] 67/17 68/17 69/1 69/22 70/14
70/22 71/6 71/20 72/16 73/6
Electronics [1] 52/16
eliminated [1] 34/2
elimination [6] 163/8 163/10 163/15
163/24 164/22 166/11
else's [1] 122/12
embassy [1] 129/22
emergency [2] 56/10 140/15
eminent [6] 104/19 105/4 105/15
105/23 106/10 128/7
employed [8] 48/24 58/7 58/9 77/16
142/23 143/1 143/7 151/2
employee [2] 59/1 64/21
employees [2] 162/8 162/8
enable [1] 96/8
encompass [1] 147/18
energy [1] 40/22
engaged [1] 103/2
engagement [8] 7/17 145/23 146/1
146/7 146/8 148/14 149/3 150/16
engaging [1] 43/5
ensure [2] 92/5 160/15
entail [1] 109/17
enter [1] 112/6
enterprise [3] 81/3 100/3 132/25
enterprises [1] 78/22
entirely [1] 30/4
entities [17] 51/2 85/17 92/14 102/11
105/19 111/8 112/21 112/21 112/22
112/23 160/14 162/2 162/3 162/9
162/13 163/21 163/23
entitled [1] 170/21
entity [7] 84/10 85/11 87/8 87/11 92/19
124/6 160/17
entries [4] 163/24 163/25 164/23
166/12
environment [1] 130/19
envisioned [1] 39/15
equity [2] 27/17 42/5
equivalent [1] 44/9
equivalents [6] 8/17 34/19 87/5 123/25
164/3 166/18
Ernst [31] 43/16 43/21 45/10 45/12
103/7 103/9 103/11 127/10 127/16
143/2 143/3 143/7 143/11 143/21 145/5
145/16 145/17 145/18 146/16 146/20
146/20 150/15 151/23 153/9 154/6
154/9 154/10 154/16 155/18 159/5
162/1
ERP [1] 155/24
Esq [5] 1/14 1/15 1/17 1/18 1/18
Essentially [1] 26/10
establish [1] 19/22

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 176 of176
185

E
established [2] 24/19 24/19
estimate [1] 75/16
evaluate [1] 86/4
evaluated [1] 115/15
evaluating [2] 86/1 86/23
evaluation [2] 85/15 156/16
evening [2] 167/13 167/17
event [3] 96/16 96/17 96/18
events [2] 138/2 138/2
everybody [1] 78/15
everyone [4] 2/22 48/10 76/22 135/14
evidence [21] 3/21 53/2 59/13 64/9
65/4 86/11 107/17 120/4 120/12 132/19
132/20 141/22 141/23 144/2 154/23
155/1 158/4 158/8 158/13 159/11
159/15
Evidence 902 [2] 141/22 158/8
evident [2] 17/8 19/4
ex [1] 116/25
ex-president [1] 116/25
examination [17] 3/8 22/1 22/3 42/19
46/2 48/22 57/9 58/3 63/11 64/10 74/15
77/13 96/7 110/1 110/2 135/21 142/21
exceed [1] 44/9
Excel [1] 159/2
exception [1] 54/14
exchange [1] 112/7
excluded [13] 9/14 9/18 12/24 12/25
13/6 13/11 13/13 13/21 13/25 14/19
15/20 15/23 15/24
excludes [1] 14/8
exclusion [2] 13/7 13/9
exclusively [1] 28/2
excuse [10] 16/19 25/19 36/17 37/10
42/14 63/13 63/21 71/9 72/21 128/21
excused [8] 47/7 47/9 57/13 57/15 75/9
75/13 141/9 141/11
execute [1] 27/19
executed [3] 85/1 116/4 136/23
executing [1] 39/14
execution [1] 27/11
executive [1] 156/19
exhibit [53]
Exhibit 5 [1] 120/12
Exhibit 7A [3] 90/11 91/5 101/3
Exhibit B [8] 153/22 154/14 154/23
156/23 158/3 158/15 159/10 162/20
Exhibit C [27] 3/22 4/16 4/25 6/1 6/15
7/12 8/16 9/16 11/12 11/17 13/17 15/2
15/9 53/3 59/7 59/13 60/8 74/21 86/11
92/6 93/22 94/12 95/16 97/11 98/9
108/2 139/8
exhibits [8] 141/23 142/6 142/7 142/9
142/12 142/14 170/1 170/2
Exhibits B [1] 141/23
existing [1] 95/22
exists [1] 96/19
exited [8] 47/16 47/19 75/20 75/24
134/7 134/17 167/19 168/7
expand [1] 131/2
expanded [1] 130/9
expect [3] 45/15 45/17 108/24
expected [3] 13/12 13/24 102/21
expecting [1] 102/23
experience [4] 14/9 17/6 18/6 59/9
expertise [1] 157/14
explain [11] 10/5 99/3 108/10 136/1

137/23 143/14 143/20 145/25 146/14


147/25 167/21
explanation [1] 156/24
express [4] 96/8 143/12 143/17 144/2
extend [1] 102/21
extended [1] 127/20
extension [2] 102/14 127/5
extensively [1] 9/10
extent [2] 19/22 41/7
external [3] 92/22 92/23 102/5
extremely [1] 92/3
eye [1] 125/6

F
fabricated [1] 26/25
face [5] 17/9 17/22 19/2 19/4 32/2
faces [1] 105/2
facility [1] 40/19
fact [25] 3/15 4/25 6/2 6/14 7/2 10/13
16/18 20/6 23/20 25/16 29/19 29/23
29/24 41/22 84/16 90/3 94/16 95/12
98/25 100/23 104/12 116/20 120/15
126/15 137/16
factories [12] 26/8 26/12 33/19 35/8
35/8 35/11 36/9 124/19 124/19 124/21
157/7 157/9
factory [24] 26/17 40/1 40/3 40/6 40/10
81/10 83/1 83/11 83/20 83/24 103/22
104/14 105/8 105/10 105/12 106/16
106/21 106/21 118/6 119/3 128/12
131/6 131/12 131/16
failed [1] 133/11
failure [4] 132/12 133/19 137/20
138/15
fall [7] 38/21 39/4 44/14 44/25 45/8
46/14 46/23
fallen [1] 17/12
false [2] 46/17 46/25
families [1] 106/12
Fargo [6] 58/10 58/11 58/19 58/25 59/1
64/21
FBI [4] 46/11 46/22 114/10 114/14
February [4] 78/25 79/1 111/12 132/21
February 8 [1] 132/21
Federal [2] 141/22 158/8
fifth [1] 21/16
figure [10] 84/8 89/14 89/17 89/19
89/22 148/4 164/4 165/10 165/11 167/1
figures [7] 11/7 87/19 87/20 87/22
88/18 88/18 89/4
file [5] 27/5 99/8 114/21 115/9 126/3
filed [5] 38/20 39/3 46/14 46/17 133/14
files [2] 159/1 159/2
filings [1] 50/1
fill [1] 82/20
final [2] 35/5 90/17
finally [2] 99/21 148/22
finance [22] 78/18 78/19 79/14 80/7
80/14 80/16 81/3 82/4 85/25 100/3
100/16 105/7 105/17 111/4 111/5 111/6
115/9 115/14 122/15 122/17 132/25
136/5
financial [169]
financially [1] 87/14
financials [31] 3/24 4/2 4/15 6/9 7/9 8/3
10/10 10/11 18/7 18/21 19/8 20/1 20/12
30/12 30/19 30/21 30/23 31/8 31/17
31/23 32/12 32/13 33/5 36/8 120/16
120/23 121/6 121/9 126/20 127/6 144/3

financing [10] 79/12 85/3 85/11 92/4


92/4 106/16 107/4 109/16 118/15
132/25
finish [2] 119/10 127/4
finished [3] 35/14 36/12 125/2
firm [21] 24/15 24/19 30/19 30/20
43/15 49/2 78/10 78/16 78/24 79/3 79/4
110/18 110/21 143/4 143/4 143/5
144/23 148/21 151/23 157/14 157/21
firms [3] 24/15 43/14 110/25
fiscal [9] 6/18 6/18 6/19 6/21 94/18
94/19 94/20 94/23 133/7
Fitzgerald [1] 49/3
FIU [2] 144/13 144/21
five million [2] 104/3 104/4
five o'clock [1] 168/5
floor [2] 1/19 83/25
FLORIDA [15] 1/2 1/6 1/16 1/20 1/23
24/15 24/21 49/10 49/14 49/15 83/2
144/8 144/12 161/14 163/16
flows [2] 157/4 157/5
focus [4] 24/10 67/3 87/18 162/22
focused [1] 111/6
folks [1] 91/1
follow-up [2] 54/14 54/16
Food [1] 140/22
footnote [7] 17/7 18/7 18/16 19/9 20/1
20/12 20/16
footnotes [5] 20/18 21/13 97/23 98/10
98/15
foregoing [2] 142/20 170/20
forget [2] 46/6 52/9
form [13] 9/8 12/20 14/22 16/13 27/2
41/19 52/8 87/24 88/20 93/13 93/14
101/21 108/23
forma [30] 8/22 8/25 9/2 9/6 9/7 9/13
10/1 10/3 10/6 12/12 12/14 16/19 16/20
16/22 17/17 31/9 31/18 32/8 32/12
33/14 33/22 33/25 35/8 36/9 92/7 93/11
97/17 123/3 123/9 126/12
format [1] 142/14
former [6] 25/4 25/6 64/21 116/20
117/8 118/25
formerly [1] 64/21
forms [1] 10/8
formulate [1] 143/16
formulation [1] 85/23
FORT [3] 1/3 1/6 1/23
forwarded [2] 10/22 121/14
Foster [11] 1/14 3/6 47/4 77/2 167/9
169/3 169/4 169/6 169/10 169/11
169/13
Foster-Steers [7] 1/14 169/3 169/4
169/6 169/10 169/11 169/13
fourth [2] 6/18 94/19
Francine [3] 1/21 170/23 170/24
Frank [1] 57/24
frequency [1] 151/15
frequently [2] 18/18 129/21
Friday [4] 3/10 5/11 9/10 22/7
friend [1] 49/15
front [7] 11/17 42/11 48/19 68/9 68/20
77/9 83/22
Fudally [11] 57/18 57/21 57/24 58/5
59/6 60/13 61/16 64/18 64/19 74/17
169/7
fulfill [1] 18/14
function [1] 58/18
fund [5] 18/20 36/25 42/12 100/14

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 177 of177
185
fund... [1] 132/3
fundamental [1] 35/22
funded [4] 20/7 30/13 36/18 37/8
funding [3] 18/18 20/8 42/7
funds [3] 59/18 61/4 62/23
furnished [8] 6/21 91/11 91/12 94/1
94/23 97/14 107/19 125/2

grounds [3] 133/2 138/8 138/10


group [17] 9/1 12/16 111/4 111/7
121/21 121/24 122/1 122/4 162/24
163/6 163/10 163/15 164/10 165/14
165/14 166/6 166/7
group 1 [1] 163/10
group 2 [1] 163/15
groups [1] 133/1
Gutierrez [1] 56/9

G-A-B-R-I-E-L-A [1] 58/2


GAAP [22] 5/5 5/9 5/15 5/21 6/2 17/6
17/7 17/10 18/1 18/6 18/17 18/24 19/3
19/5 19/12 20/11 31/23 32/3 32/8 32/11
41/14 41/17
Gabby [1] 57/18
GABRIELA [4] 57/21 57/24 58/2 169/7
Gamboa [11] 67/17 68/17 69/1 69/22
70/14 70/22 71/6 71/20 72/16 73/6 74/2
gather [3] 8/7 36/23 52/2
gathering [3] 153/2 154/12 154/13
general [7] 78/1 78/2 79/7 83/22
113/15 118/25 147/12
generated [1] 26/25
gentleman [2] 69/22 73/15
gentlemen [1] 132/22
George [1] 78/6
German [2] 161/18 161/21
Germany [3] 161/18 161/19 163/14
Gerstin [1] 1/18
gets [2] 41/22 106/8
gives [1] 137/2
GJW [1] 66/11
GJWB [1] 66/14
GJWB19 [1] 68/7
Global [1] 116/23
GMBH [2] 161/18 163/17
gonna [34] 25/7 25/8 27/7 32/12 43/1
43/8 53/2 61/21 65/4 66/7 67/3 68/7
78/12 86/10 89/8 90/10 103/10 116/17
117/1 128/12 128/13 129/2 130/11
131/5 131/9 142/9 144/4 145/25 148/10
158/15 164/13 165/21 167/15 167/21
Goodman [2] 49/2 49/3
goods [6] 35/14 35/19 35/25 36/12
125/2 125/2
gotten [2] 115/9 160/2
government [18] 28/22 48/13 57/16
64/4 64/22 65/12 76/9 77/4 79/12
104/25 106/10 113/19 119/6 129/21
141/12 154/23 158/3 159/10
Government's [26] 3/22 6/1 6/14 11/12
48/17 53/3 57/21 59/7 59/13 60/8 62/5
64/1 64/9 74/21 77/7 86/11 90/10
141/16 153/23 155/1 158/5 158/13
159/12 159/15 169/2 170/2
Government's C [1] 62/5
governmental [1] 128/18
grab [1] 66/14
graduate [1] 78/5
graduated [1] 110/16
graduating [1] 144/21
graduation [1] 111/12
grant [1] 32/18
granted [1] 102/21
great [2] 82/16 157/19
greatly [2] 146/10 149/15
ground [1] 129/23

H-O-B-S-O-N [1] 48/21


Haiti [40]
half [1] 124/10
hand [7] 48/16 56/4 57/19 66/11 77/6
141/15 160/25
handing [2] 3/21 153/21
Harold [1] 24/24
head [1] 56/10
health [6] 92/4 92/20 122/3 122/5
122/11 124/5
healthy [1] 87/14
hear [2] 21/9 78/15
heard [3] 30/18 47/1 126/25
hearing [2] 2/10 142/2
hearings [1] 75/15
hearsay [4] 25/10 25/13 46/19 87/25
heart [1] 116/11
Hello [1] 160/13
help [3] 82/20 92/5 155/16
helped [3] 51/1 51/2 51/18
helping [1] 79/21
Herb [3] 69/1 70/13 70/21
Here's [3] 68/10 68/11 71/15
hereby [2] 95/23 96/12
hereof [3] 96/15 96/16 96/19
hereto [1] 121/10
hereunder [1] 120/10
hey [1] 42/6
higher [1] 104/11
highlighted [1] 59/17
highlighting [1] 34/18
Hillary [1] 118/22
hired [1] 127/16
hiring [1] 127/10
history [3] 85/18 86/9 102/12
hit [2] 60/18 116/11
Hobson [13] 48/15 48/17 48/21 48/24
49/4 50/10 52/25 53/10 54/17 54/25
56/11 57/2 169/6
hold [2] 66/14 144/5
Holdings [12] 73/4 73/8 88/12 91/17
121/23 161/3 161/10 162/10 162/11
163/13 163/14 163/16
Holdings, [5] 73/25 90/12 98/14 161/14
163/16
Holdings, Inc [1] 161/14
Holdings, LLC [4] 73/25 90/12 98/14
163/16
holiday [1] 102/19
home [4] 26/25 85/13 130/18 130/21
homes [10] 39/23 40/11 40/22 41/2
104/16 106/6 107/7 115/21 140/11
156/14
honestly [2] 4/4 56/15
Honor [60]
Honorable [1] 1/11
hope [1] 155/15
Horacio [3] 69/23 71/7 71/20

horizon [4] 149/17 150/1 150/22 151/1


horrible [1] 116/12
house [3] 53/14 53/14 128/17
houses [12] 104/16 105/22 106/12
116/18 118/15 118/16 125/21 128/12
130/12 131/23 132/1 140/11
housing [8] 26/13 81/11 81/12 81/20
82/16 103/24 109/17 131/4
hum [10] 62/21 66/3 66/6 68/4 71/2
74/23 99/11 106/23 122/20 128/8
hundred [3] 24/17 34/9 34/10
hurricane [1] 115/19

I
I'd [6] 43/10 59/6 60/7 61/15 74/20
165/2
I'll [17] 3/4 5/12 24/10 25/16 31/6 33/9
41/12 45/25 45/25 65/22 66/7 68/8 89/6
117/22 132/20 162/22 164/24
I'm [66]
I've [3] 59/17 75/15 117/13
identification [6] 60/2 64/2 153/22
153/23 158/5 159/12
identify [2] 83/14 106/7
III [1] 96/14
imagine [2] 73/23 150/22
immediate [1] 44/24
immediately [2] 44/5 118/23
impact [1] 105/5
imperative [1] 119/12
implementation [2] 156/7 156/8
implementing [2] 79/25 155/23
in-house [2] 53/14 53/14
in-process [1] 156/7
Inc [2] 71/16 161/14
incapable [1] 46/6
include [3] 84/24 90/23 131/4
included [2] 132/12 138/24
including [1] 66/1
inclusion [1] 17/7
income [15] 7/10 11/2 11/8 16/6 16/19
16/20 17/17 26/13 81/12 81/20 89/12
103/23 124/9 165/10 166/25
incoming [6] 59/22 61/9 74/8 74/9
74/17 74/21
incomplete [2] 14/12 14/13
independent [1] 30/19
INDEX [2] 169/1 170/1
indicated [2] 61/25 62/4
indicates [1] 34/22
indicating [4] 12/10 68/22 83/16 90/1
individual [4] 32/6 50/10 146/15
164/21
individually [1] 44/8
individuals [1] 67/22
inevitably [3] 36/18 40/14 40/14
inform [1] 138/6
information [70]
informed [1] 96/9
inherent [1] 156/2
initial [6] 20/7 32/25 33/10 84/11
103/25 104/1
initially [3] 29/24 115/20 153/1
Initiative [2] 116/24 128/15
Innorez [6] 90/12 95/21 97/1 97/3
161/18 163/14
InnoVida [161]
InnoVida's [7] 81/13 81/16 81/18 83/1
91/21 91/22 108/18

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 178 of178
185

I
inquiries [1] 143/16
instance [1] 19/25
intention [1] 128/16
interact [1] 162/7
interacted [1] 151/16
intercompany [2] 34/3 34/7
interest [4] 114/2 114/5 114/7 127/1
interested [3] 82/18 150/5 152/17
interests [2] 26/12 124/19
internal [1] 156/6
internally [1] 95/9
international [3] 49/13 144/12 156/1
interpose [1] 165/17
interpretation [2] 33/24 88/1
interrupted [1] 117/13
interview [4] 46/9 46/10 114/13 114/20
interviewed [1] 46/23
interviews [1] 147/11
introduce [4] 63/24 142/17 154/23
158/3
introduced [7] 59/7 59/12 60/8 62/4
83/9 86/10 90/10
investigate [1] 125/10
investigating [1] 79/21
investigation [3] 37/23 62/13 96/8
investment [4] 77/19 90/13 96/1 100/9
invoice [2] 55/20 55/24
involvement [1] 151/18
irrelevant [1] 74/17
Island [4] 161/6 161/10 161/12 161/22
Islands [1] 95/22
issuance [3] 136/11 136/14 136/15
issue [14] 28/9 29/23 105/14 105/23
105/24 105/24 106/3 121/2 126/14
128/7 142/3 142/13 146/21 148/25
issued [3] 121/1 125/19 132/8
issues [19] 27/3 39/13 39/23 40/4 40/5
102/18 104/18 104/20 104/22 104/24
105/9 106/8 127/19 127/23 128/2
128/18 130/3 157/13 157/21
issuing [1] 138/8
items [1] 54/2

J
Jacqueline [1] 1/18
James [1] 132/24
James C [1] 132/24
January [16] 3/23 36/6 38/23 39/18
86/15 89/3 115/4 117/17 120/4 120/7
120/17 120/20 126/3 131/8 135/24
144/22
January 21 [2] 117/17 135/24
January 21st [1] 120/4
January 26 [2] 120/7 126/3
January 28 [4] 3/23 36/6 86/15 89/3
January 28th [2] 120/17 120/20
January 5 [1] 38/23
January, [4] 44/20 82/9 84/6 84/15
January, 2010 [3] 82/9 84/6 84/15
January, 2011 [1] 44/20
Japanese [1] 112/5
job [15] 79/4 112/16 113/14 113/15
113/21 122/10 122/11 122/13 123/22
123/23 125/13 125/14 125/15 146/10
150/16
joint [6] 26/12 26/22 27/1 64/6 82/7
127/13

Jones [4] 110/22 110/23 112/9 112/17


Judge [9] 1/12 2/2 47/19 47/21 75/24
76/2 134/17 134/19 168/7
July [5] 1/6 2/1 55/22 58/23 76/1
JULY 1 [2] 2/1 76/1
July 16 [1] 55/22
June [4] 16/5 72/2 114/8 114/17
June 30 [1] 16/5
jurors [1] 76/14
jury [84]
jury's [2] 30/18 69/12

K
keep [2] 129/16 129/18
kids [1] 130/21
Kimberly [1] 1/15
kinds [1] 153/3
knowledge [4] 26/16 38/1 38/4 100/17

L
L-A-M-A-C-C-H-I-A [1] 141/20
LA [1] 141/16
labeled [4] 63/19 69/11 73/8 73/24
lack [1] 26/8
lacked [1] 18/7
Ladies [1] 132/22
LaMacchia [25] 141/14 141/20 142/23
144/4 149/18 152/13 153/21 155/6
155/9 155/14 156/9 156/12 157/18
158/15 159/17 159/18 160/8 162/22
164/1 164/7 164/17 164/20 165/23
167/22 169/12
land [7] 39/23 40/3 104/20 105/9
105/11 106/8 128/10
language [2] 40/12 41/9
lapse [1] 96/17
large [9] 22/17 28/22 28/25 29/3 33/20
78/21 110/18 121/21 121/23
largely [1] 113/7
late [1] 114/6
latest [2] 70/8 71/3
latitude [1] 5/12
LAUDERDALE [3] 1/3 1/6 1/23
law [18] 24/15 24/15 46/5 49/9 49/11
49/12 49/13 78/4 78/9 78/10 78/16
78/24 79/3 79/4 110/16 110/18 110/25
156/5
laws [1] 95/22
lawsuit [4] 47/2 132/10 137/21 137/21
lawsuits [9] 38/20 39/3 46/14 46/16
46/24 132/12 132/17 133/14 138/7
lawyer [20] 22/8 23/1 23/1 23/6 23/13
28/17 28/23 29/6 31/15 32/6 42/1 49/5
49/6 53/14 110/8 110/11 114/14 115/17
115/25 121/13
lawyers [3] 24/20 53/14 53/16
laying [1] 147/4
laypeople [1] 122/6
leading [3] 118/5 118/8 153/4
learn [1] 26/2
learned [6] 26/6 26/17 127/16 128/20
129/24 138/7
lease [1] 40/3
leased [1] 105/10
leave [3] 75/11 79/3 167/20
leaving [1] 49/11
ledgers [1] 147/12
left-hand [1] 56/4
legal [16] 37/20 44/6 49/25 50/14 77/25

79/15 79/16 80/16 80/17 82/5 90/21


90/24 99/16 128/2 128/18 133/12
lend [3] 41/23 87/11 87/12
lender [7] 19/23 19/23 27/17 32/6
35/17 35/23 42/5
lenders [2] 18/18 29/14
lending [6] 50/2 50/4 50/5 78/21 111/5
111/8
letter [18] 85/2 116/3 119/23 120/5
132/5 132/6 132/7 132/11 132/15
132/22 135/24 136/2 136/4 136/7
136/12 136/14 137/14 137/16
levels [1] 160/3
Lewis [7] 158/18 159/4 159/7 159/17
160/9 160/13 162/15
liabilities [1] 87/3
license [1] 144/9
licenses [2] 144/6 152/12
life [1] 79/25
light [2] 156/11 156/11
Limited [4] 90/12 95/21 151/18 163/14
linchpin [1] 87/10
Lincoln [3] 161/15 162/12 162/13
lined [1] 142/12
Lines [4] 109/8 138/21 141/1 141/4
Lisa [1] 56/9
list [7] 54/2 54/7 54/8 54/10 142/4
149/6 149/7
lists [1] 159/20
litigation [15] 37/17 37/20 38/1 38/5
38/6 38/8 43/25 44/13 44/21 44/25 45/6
45/8 138/2 138/4 138/5
litigation's [1] 38/10
LLC [5] 69/16 73/25 90/12 98/14
163/16
loan [109]
loaned [1] 114/1
loaning [1] 140/10
loans [3] 29/1 29/3 115/2
local [1] 160/16
location [1] 162/8
Lois [1] 1/14
London [1] 78/11
loss [4] 165/12 165/14 167/3 167/7
losses [1] 58/17
low-income [4] 26/13 81/12 81/20
103/23
lunch [2] 75/15 75/18
Luncheon [1] 75/25
Lynn [18] 3/23 20/3 36/6 57/3 80/25
82/2 83/4 83/4 84/22 85/25 86/18 90/25
120/22 121/14 122/16 122/19 123/23
127/13
Lynn's [2] 125/14 125/18

M
MACCHIA [1] 141/16
mail [38]
maintained [1] 162/13
major [2] 28/15 43/14
management [4] 92/19 95/9 122/25
144/1
managers [3] 146/3 146/4 146/5
manner [1] 157/15
manufacture [3] 81/10 81/11 83/25
manufactured [1] 124/21
manufacturing [3] 40/18 112/22
112/23
March [12] 11/14 11/23 13/19 13/22

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 179 of179
185

M
March... [8] 50/20 90/8 95/6 96/2 98/10
98/17 130/5 131/8
March 31 [6] 11/14 11/23 13/19 13/22
98/10 98/17
March 9 [1] 96/2
March, [2] 50/25 51/7
March, 2010 [2] 50/25 51/7
Margolis [3] 69/1 70/13 70/22
mark [8] 48/14 48/17 48/21 73/15
100/1 100/5 100/13 169/6
marked [6] 64/1 153/21 153/23 158/5
159/12 170/2
market [2] 58/12 58/13
Marl [1] 161/19
maroon [1] 83/16
massively [3] 87/8 87/9 87/17
master's [1] 49/12
material [3] 96/15 97/8 148/6
materials [2] 103/22 156/13
mathematical [2] 164/21 166/10
matter [13] 25/17 29/13 29/23 45/5
50/14 50/18 50/24 51/8 51/12 51/12
51/15 116/20 170/21
matters [9] 44/2 49/25 50/2 50/3 50/4
50/5 75/23 96/9 168/5
May 20 [4] 69/17 70/1 70/5 71/25
May 20th [1] 70/5
mean [45]
meaning [3] 92/21 93/13 97/22
meaningful [2] 34/2 148/6
means [5] 9/7 33/14 40/17 95/5 122/5
meant [5] 8/25 95/3 122/24 123/4
123/12
mechanical [1] 1/24
medium [3] 81/3 100/3 132/25
meet [5] 7/23 27/18 52/17 78/22 83/7
meeting [10] 23/15 23/17 38/23 84/7
117/2 117/3 117/14 118/7 118/8 120/10
Meland [2] 73/15 73/18
member [5] 10/5 79/16 80/6 85/22
125/15
members [37]
memo [7] 154/1 154/5 154/7 154/9
155/9 155/19 155/21
memory [3] 155/20 157/20 166/3
messy [1] 34/17
Miami [16] 1/16 1/20 83/5 83/17 84/6
84/12 84/15 84/17 84/20 105/14 107/1
117/2 131/16 144/24 161/16 161/24
microphone [5] 48/19 59/24 77/9
141/18 164/8
Microsoft [1] 155/23
middle [1] 116/2
military [2] 119/1 119/2
million [20] 3/13 20/9 33/12 34/9 34/10
34/19 56/23 61/14 63/4 63/8 99/23
99/25 100/13 103/18 104/3 104/4 114/1
119/19 124/1 124/10
minimum [1] 146/11
minute [4] 47/11 117/1 117/23 134/2
minutes [6] 47/14 47/18 119/25 134/5
134/13 134/16
misleading [3] 14/17 14/18 14/20
mismatch [1] 112/4
mistake [1] 54/15
mitigate [1] 58/17
model [1] 156/2

moment [1] 109/20


MONDAY [2] 2/1 76/1
money [16] 26/21 34/6 35/2 35/24 37/4
41/24 86/24 99/22 103/20 103/21 104/7
113/19 124/15 126/23 137/2 156/25
monies [6] 98/25 100/14 102/8 140/9
140/10 140/21
months [2] 49/15 119/20
Montreal [1] 161/23
Moran [1] 67/17
Moran-Osorio [1] 67/17
morning [7] 2/10 22/5 22/6 58/5 58/6
64/15 64/16
mostly [2] 52/12 92/11
move [17] 17/12 21/17 63/23 64/4 64/6
82/19 82/24 84/23 90/3 94/4 100/8
119/6 119/12 141/23 154/23 158/3
159/10
moved [2] 37/7 119/15
movement [1] 64/6
moving [3] 15/22 64/3 64/5
Mr [4] 169/4 169/5 169/8 169/11
Mr. [161]
Mr. Alford [34] 28/13 29/5 32/10 34/14
36/14 36/24 37/2 53/17 77/15 77/16
81/25 84/20 86/10 86/15 86/23 88/17
89/12 91/4 91/16 96/21 97/21 98/2
98/24 99/4 100/17 104/18 108/20 109/7
110/7 134/8 135/3 135/5 135/23 140/20
Mr. Cameron [1] 23/4
Mr. Carness [1] 160/21
Mr. Hobson [9] 48/24 49/4 50/10 52/25
53/10 54/17 54/25 56/11 57/2
Mr. LaMacchia [20] 142/23 144/4
149/18 152/13 153/21 155/6 155/14
156/9 156/12 157/18 158/15 159/17
160/8 162/22 164/1 164/7 164/17
164/20 165/23 167/22
Mr. Lewis [1] 159/4
Mr. Meland [1] 73/18
Mr. Osorio [13] 25/3 25/21 25/22 25/25
83/8 84/5 115/20 117/7 117/10 117/24
120/13 127/14 127/16
Mr. Osorio's [1] 118/10
Mr. Sharpstein [11] 42/21 43/24 44/19
48/2 63/17 133/23 135/17 135/23 137/4
137/13 138/20
Mr. Smith [31] 2/9 2/14 3/10 4/2 4/19
4/24 5/24 7/7 9/13 10/8 11/7 15/4 15/19
16/7 16/21 20/17 20/24 22/5 42/21
43/24 45/5 46/4 127/9 127/11 127/12
127/14 130/6 131/2 137/5 137/9 137/10
Mr. Toll [30] 26/4 27/25 28/2 38/19
43/5 52/14 52/21 52/24 55/17 56/14
70/25 72/18 83/9 83/12 84/5 97/6 118/3
118/4 121/8 123/12 127/14 127/15
137/12 150/11 150/14 150/25 151/2
151/10 152/12 152/15
Mr. Toll's [8] 2/4 47/23 76/5 134/22
151/7 151/17 151/25 153/14
Mrs. [1] 61/15
Mrs. Podalski [1] 61/15
Ms [11] 23/9 35/6 128/6 169/3 169/4
169/6 169/8 169/9 169/10 169/11
169/13
Ms. [22] 3/6 27/11 28/13 32/10 34/14
36/14 36/25 38/19 38/24 47/4 58/5 59/6
60/13 64/3 64/19 74/17 77/2 81/1 116/3
117/15 120/25 167/9

Ms. Foster-Steers [4] 3/6 47/4 77/2


167/9
Ms. Fudally [5] 58/5 59/6 60/13 64/19
74/17
Ms. Selmore [1] 64/3
Ms. Tabernacki [11] 27/11 28/13 32/10
34/14 36/14 36/25 38/19 38/24 116/3
117/15 120/25
Ms. Tabernacki's [1] 81/1
multinational [1] 29/1
multiple [1] 110/20

N
N.E [1] 1/16
name [26] 43/15 48/19 48/20 50/11
50/14 56/3 57/4 57/23 57/23 58/1 64/17
69/22 73/15 77/9 77/10 77/11 80/2 80/3
80/5 103/7 109/8 110/21 111/6 141/18
141/19 149/19
names [2] 68/5 83/10
native [1] 142/14
nature [2] 24/7 26/14
navigation [1] 155/24
near [1] 161/22
necessary [2] 96/8 103/22
neck [1] 126/22
negative [2] 167/2 167/3
negotiate [5] 23/7 27/7 90/21 99/19
126/4
negotiated [7] 7/24 18/22 29/19 40/3
40/7 40/14 41/6
negotiating [3] 3/12 5/25 22/20
negotiation [3] 39/9 79/24 90/20
negotiations [6] 4/3 6/8 24/1 36/23
36/24 127/4
net [9] 11/2 11/8 16/6 89/12 124/9
165/10 165/12 165/14 166/25
New York [1] 78/11
newly [1] 112/20
NGO [2] 106/11 118/15
NGOs [4] 105/19 106/24 107/6 128/15
nice [2] 75/18 167/17
nickel [2] 36/16 126/18
nine [4] 2/10 3/1 124/10 149/25
nine o'clock [2] 2/10 3/1
nine-and-a-half [1] 124/10
Nineteen [1] 72/10
nobody [1] 67/20
none [5] 17/7 19/8 19/10 19/12 19/14
nongovernment [1] 106/24
nongovernmental [1] 105/25
normal [3] 154/9 154/15 158/10
north [1] 109/15
notations [2] 97/25 98/15
noted [1] 164/3
notice [4] 38/13 44/2 96/18 138/2
notification [2] 44/25 45/6
notified [3] 39/21 132/14 132/17
notify [6] 38/8 44/5 132/12 133/11
137/20 137/21
November [2] 114/18 115/2
number [66]
Number '0059 [1] 160/10
Number '0429 [1] 140/23
Number '1788 [1] 13/17
Number '2280 [1] 15/15
Number 0003031 [1] 89/8
Number 15 [1] 74/3
Number 20 [1] 72/12

Case 1:12-cr-20901-WPD Document 198 Entered on FLSD Docket 10/29/2013 Page 180 of180
185
OPIC's [5] 86/24 98/25 122/13 136/4
138/1
number 2010081100051248 [1] 62/15 opinion [5] 96/9 143/17 144/3 146/21
Number B [1] 164/14
148/25
numbers [6] 9/3 9/5 60/4 66/10 66/12 opinions [1] 143/12
68/12
opposed [1] 165/8
numerous [1] 19/20
orange [1] 34/18
order [5] 47/1 52/2 147/7 156/16 162/2
O
ordinarily [1] 34/7
o'clock [7] 2/10 3/1 75/16 75/19 75/22 ordinary [1] 33/24
75/23 168/5
ORG [1] 74/24
oath [2] 2/14 135/6
organization [2] 139/16 147/14
Obama [1] 117/9
organizations [3] 105/25 106/24
object [2] 23/10 64/5
118/19
objected [2] 24/6 45/24
organize [1] 51/2
objecting [1] 15/22
organized [4] 79/13 82/6 86/6 95/21
objection [19] 5/7 9/8 12/20 14/22
original [2] 41/7 41/9
16/13 21/4 25/11 46/19 63/23 64/7
originally [3] 40/10 43/7 131/5
87/24 88/20 94/4 94/4 101/21 154/24
originator [1] 74/25
158/11 159/13 165/18
Osorio [43]
objective [1] 105/15
Osorio's [1] 118/10
obligations [2] 112/20 120/10
ours [2] 150/16 150/16
obtain [3] 52/10 54/21 99/22
outgoing [1] 74/10
obtained [3] 8/12 56/13 85/1
overall [4] 82/7 85/19 118/17 122/3
obtaining [2] 39/25 40/5
Overruled [13] 9/11 12/22 15/25 16/2
occasion [1] 50/13
16/15 21/7 21/18 46/20 88/3 88/22 94/6
occasions [5] 31/7 31/12 32/2 50/19
101/23 165/19
52/17
overseas [4] 29/2 77/19 90/12 95/25
occupation [1] 49/4
owe [1] 112/5
occupy [1] 106/12
owed [3] 34/6 34/9 34/10
October [4] 114/11 158/16 159/18
owned [4] 33/19 40/19 65/25 128/10
160/11
owners [1] 156/19
October 4 [1] 114/11
ownership [1] 160/3
October 6 [3] 158/16 159/18 160/11
owns [1] 86/7
October, [1] 49/21
Oxley [1] 156/5
October, 1999 [1] 49/21
P
off-tank [1] 107/18
offering [1] 119/1
p.m [5] 75/25 76/1 134/18 134/18 168/8
office [7] 81/20 83/10 117/4 117/4
package [2] 73/1 106/20
129/10 160/16 161/24
page [28] 11/21 16/11 35/5 36/7 36/8
officer [7] 6/23 76/13 79/14 94/24
37/11 37/16 40/15 67/4 67/11 88/8 89/6
95/20 151/9 153/16
92/8 97/20 97/21 97/25 124/8 132/21
officer's [2] 6/24 95/1
133/2 156/23 160/10 160/11 164/13
officers [1] 156/19
165/1 165/3 165/9 167/5 169/2
offices [5] 78/10 83/22 84/12 110/20
page 2 [1] 133/2
111/2
page 6 [1] 37/16
official [6] 1/21 62/18 63/1 63/6 65/15 page 7 [1] 40/15
170/24
pages [1] 68/7
offtaker [4] 106/11 107/8 108/12
panels [30] 26/13 36/16 40/21 81/10
108/19
81/18 84/1 84/13 103/22 104/15 104/16
offtakers [7] 105/19 105/25 106/3
105/13 105/14 105/17 105/18 105/20
106/7 106/14 107/6 108/9
106/5 106/6 106/22 106/25 107/7
oh [4] 65/21 124/1 139/13 158/24
107/21 119/3 124/13 124/16 124/21
oldest [1] 24/15
124/24 125/7 126/19 131/14 131/20
omitted [1] 12/19
paper [2] 85/23 100/8
one o'clock [2] 75/16 75/23
papers [1] 154/19
ongoing [3] 92/21 149/9 149/10
paragraph [8] 139/14 155/14 155/22
online [1] 63/3
156/24 157/1 157/10 157/18 157/19
operate [2] 26/14 82/6
parameters [1] 85/3
operated [2] 40/19 66/1
paraphernalia [1] 119/2
operating [8] 85/18 86/8 102/11 112/21 parcel [1] 40/5
112/23 162/18 162/18 164/22
Pardon [1] 14/21
operation [1] 40/18
parent [12] 5/19 6/20 6/23 44/7 91/9
operationally [1] 58/15
94/21 94/24 95/7 121/23 133/4 133/6
operations [17] 10/23 10/25 13/18
133/8
13/22 16/4 16/7 89/10 91/15 98/14
part [23] 13/3 17/14 17/16 64/20 100/6
102/18 156/1 164/15 164/18 164/19
106/20 109/16 113/21 114/19 116/23
165/6 166/2 166/23
118/10 118/17 122/13 129/21 136/13
OPIC [146]
148/5 148/20 148/20 149/10 154/13

154/19 160/22 162/7


parties [4] 23/18 23/18 101/5 109/3
partner [15] 24/24 140/15 143/2 143/12
143/14 145/10 145/12 145/18 145/19
145/21 146/5 150/15 150/16 152/2
152/3
partnered [1] 128/21
partnering [1] 125/21
parts [3] 23/10 23/21 33/18
party [10] 22/20 23/1 23/9 23/10 23/13
23/20 23/22 24/2 92/22 102/5
Patricoff [5] 24/24 25/1 25/3 25/6 25/15
Pause [3] 53/8 71/11 157/3
pay [5] 108/18 112/8 114/24 114/24
133/19
payable [1] 108/19
payment [1] 108/17
payments [3] 114/5 114/7 114/25
pending [7] 27/11 37/23 38/1 44/25
45/6 45/8 156/7
penny [1] 35/19
people [15] 51/25 66/18 68/25 69/7
69/8 71/24 90/24 105/22 119/6 128/13
130/24 142/12 146/2 146/3 146/8
percent [1] 87/16
perform [1] 103/11
performing [1] 58/18
perhaps [1] 6/10
period [33] 3/12 4/3 4/5 4/12 4/21 5/24
6/10 7/20 8/17 10/25 11/4 11/13 11/22
13/18 13/22 16/5 38/13 61/17 88/14
88/15 89/14 89/21 91/15 98/17 149/11
163/2 164/2 164/4 165/4 165/6 165/22
166/24 166/25
periodically [1] 159/7
periods [2] 5/2 88/14
person [3] 51/5 52/14 137/10
personal [2] 63/2 63/3
personally [5] 52/20 55/7 65/13 73/22
122/9
personnel [1] 147/13
persons [1] 117/12
perspective [2] 17/9 19/16
pertain [1] 101/16
phase [3] 82/1 147/1 147/1
phases [1] 146/25
phone [6] 25/23 26/1 38/24 52/23
127/14 127/15
physical [1] 112/16
pictures [3] 117/7 117/10 129/25
piece [2] 111/6 113/11
place [4] 80/21 105/22 120/3 131/12
Plaintiff [2] 1/6 1/14
plan [1] 143/23
planes [1] 119/2
planning [4] 143/22 147/1 147/7
147/19
plans [1] 147/5
platform [2] 156/4 156/8
plug [1] 132/3
plus [6] 22/23 34/19 35/9 164/22
166/11 166/11
Podalski [1] 61/15
point [8] 26/20 29/12 58/20 83/14
84/23 115/18 155/17 156/9
pointing [1] 72/10
points [1] 90/25
Polan [1] 132/24
policies [1] 58/16

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185
proceeding [1] 37/21
proceedings [7] 1/11 1/24 44/7 133/13
policy [4] 84/25 85/4 85/5 100/4
142/20 168/8 170/21
political [1] 128/2
proceeds [2] 99/10 99/14
politicians [1] 117/11
process [28] 37/8 43/13 84/23 84/24
polling [4] 2/19 48/7 76/19 135/11
84/25 85/4 85/5 85/8 85/10 85/24 99/4
position [9] 7/25 8/1 8/4 81/1 145/16
99/17 100/5 100/7 115/16 115/17 132/1
151/7 151/25 152/10 153/14
143/16 143/23 146/17 146/22 149/5
positive [1] 158/20
149/9 154/13 154/13 155/16 155/23
post [2] 82/18 82/22
156/7
post-earthquake [2] 82/18 82/22
processed [1] 119/18
postpone [1] 30/6
produced [4] 1/25 26/12 29/17 30/7
postponed [4] 2/11 30/8 30/25 31/5
producing [2] 106/22 156/13
postponing [1] 39/7
production [2] 40/20 84/13
potential [2] 86/2 86/24
professionally [1] 151/17
power [1] 74/1
profit [5] 16/9 89/19 89/24 98/22
practice [1] 46/5
124/10
pre [1] 82/21
profitable [1] 99/1
pre-earthquake [1] 82/21
profits [1] 11/10
preceding [1] 160/11
progress [6] 55/9 79/23 139/3 139/6
precise [3] 31/5 40/12 47/1
139/8 139/12
precisely [1] 35/12
progressed [1] 145/10
preliminary [1] 27/18
project [67]
prepare [6] 5/20 51/1 51/18 92/14
projects [1] 80/14
92/16 92/19
promotion [1] 79/12
prepared [8] 6/2 17/5 18/1 18/16 19/2 pronounce [1] 161/7
19/5 95/9 122/25
proof [1] 107/16
presence [11] 2/18 2/24 47/13 48/6
property [3] 104/25 105/1 128/4
48/12 76/18 76/24 134/4 135/10 135/16 proposed [2] 18/14 85/20
167/15
prosecutor [24] 23/9 24/5 24/11 29/11
present [14] 2/4 2/4 4/20 17/14 47/23
31/6 31/11 31/20 33/1 35/6 36/3 37/14
47/23 76/5 76/5 91/14 99/8 99/16
37/24 38/11 41/11 46/10 46/22 67/5
134/22 134/22 157/14
73/5 74/6 113/23 114/14 120/15 121/10
presentation [3] 100/8 117/25 118/1
128/6
presented [4] 17/18 31/23 33/21 81/9 prospective [1] 99/7
president [14] 25/4 25/6 83/8 100/2
provide [4] 44/24 57/2 65/13 152/19
100/10 116/16 116/16 116/20 116/21
provided [32] 10/10 10/18 10/20 12/6
116/25 117/8 117/8 117/9 132/24
17/15 17/25 27/25 28/6 28/10 29/13
President Bill [1] 25/4
29/21 33/11 43/21 45/11 45/12 52/25
President Clinton [4] 25/6 116/16
55/17 55/18 57/3 64/22 64/25 65/11
116/21 117/8
65/25 93/21 95/12 97/12 98/3 148/16
President Obama [1] 117/9
152/23 152/24 159/4 160/21
press [4] 120/22 120/25 121/2 125/19 provisions [1] 101/4
pressure [3] 36/25 119/6 119/14
public [2] 144/7 156/6
presume [1] 20/3
pull [3] 68/8 69/10 142/8
primarily [2] 52/22 104/12
pulled [2] 132/3 142/12
principally [4] 28/16 106/3 108/16
pulling [1] 142/7
109/17
purchase [3] 103/21 107/7 107/20
principals [1] 156/18
purchased [1] 139/21
Principles [2] 41/15 143/19
purchasing [1] 106/5
print [2] 60/19 142/16
purported [3] 17/19 17/22 140/24
prints [1] 60/19
purportedly [1] 61/1
private [4] 27/17 77/19 90/12 96/1
purposes [2] 60/2 84/8
pro [31] 8/22 8/25 9/2 9/6 9/7 9/13 10/1 pursuant [16] 6/22 7/3 7/6 91/12 94/23
10/3 10/6 12/12 12/14 16/19 16/20
95/14 95/14 96/11 97/6 98/3 138/9
16/22 17/17 31/9 31/18 32/8 32/12
141/21 158/3 158/6 158/7 159/10
33/14 33/22 33/25 35/8 36/9 49/13 92/7 pursue [1] 79/23
93/11 97/17 123/3 123/9 126/12
push [2] 116/17 118/18
pro bono [1] 49/13
Q
pro forma [30] 8/22 8/25 9/2 9/6 9/7
9/13 10/1 10/3 10/6 12/12 12/14 16/19 qualified [2] 28/22 32/5
16/20 16/22 17/17 31/9 31/18 32/8
quarter [8] 6/18 6/18 6/21 94/19 94/19
32/12 33/14 33/22 33/25 35/8 36/9 92/7 94/23 95/5 98/23
93/11 97/17 123/3 123/9 126/12
question [40]
problem [3] 39/17 105/1 159/2
questioned [1] 137/5
problems [8] 39/17 39/20 127/19
questioning [3] 9/9 21/5 21/5
128/16 128/17 129/2 130/4 130/11
questions [27] 21/24 29/11 31/24
38/12 41/11 41/20 45/20 57/7 57/10
procedures [1] 58/16
72/25 75/7 109/24 121/7 123/10 123/15
proceed [1] 3/6

123/17 123/18 123/25 125/10 126/9


135/18 137/10 138/22 141/6 144/1
160/1 162/14
quick [1] 65/23
quickly [5] 37/1 37/7 82/19 119/12
119/15

R
Rabin [2] 75/2 75/3
raise [4] 48/16 57/19 77/6 141/15
raised [2] 26/24 157/13
RAK [1] 163/14
ranks [1] 145/10
rapid [1] 40/21
rarely [1] 112/21
Ras [1] 161/7
Ras al [1] 161/7
Rasco [1] 49/2
re [1] 149/7
re-requesting [1] 149/7
reach [1] 129/22
reached [1] 162/2
reaching [1] 162/6
read [6] 31/20 96/3 121/17 124/2 157/2
162/21
readily [1] 131/9
reading [3] 162/23 163/5 163/23
reads [1] 95/19
ready [5] 3/5 48/2 77/1 115/10 121/2
reasons [4] 32/17 82/17 133/16 137/17
recall [59]
recant [1] 147/9
receipt [1] 136/24
receivables [1] 34/11
receive [6] 63/7 95/11 109/5 109/18
112/7 121/11
received [14] 8/9 38/15 64/8 94/13
117/19 117/21 136/18 137/6 138/17
154/25 158/12 159/14 162/14 170/2
receiver [2] 73/16 73/20
recently [2] 116/8 140/14
recess [11] 47/11 47/18 47/20 75/15
75/22 75/25 134/2 134/16 134/18
167/13 168/4
recognition [1] 157/23
recognize [3] 53/4 153/22 165/2
recognized [1] 157/24
recollection [2] 102/16 116/9
reconciliation [1] 55/15
record [27] 2/3 3/16 15/7 20/22 21/23
37/16 42/15 45/3 48/20 57/23 63/12
63/16 63/22 65/9 66/18 72/23 76/4 77/9
107/24 109/23 134/21 141/18 154/14
155/4 158/1 159/8 170/21
recorded [1] 1/24
records [14] 62/14 62/18 62/22 63/1
63/6 65/11 65/15 147/10 147/13 161/7
161/18 161/22 161/23 162/12
RECROSS [2] 46/2 169/5
RECROSS-EXAMINATION [1] 46/2
redefined [1] 131/2
redefining [1] 40/8
Redirect [9] 42/17 42/19 74/14 74/15
135/20 135/21 169/4 169/9 169/11
reduced [1] 104/15
reduction [1] 104/7
refer [3] 25/7 100/15 105/18
reference [9] 13/7 13/9 13/12 13/20
14/19 16/18 118/20 141/1 141/3

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185
139/14 156/23 157/2 167/21
Secretary [1] 118/22
referenced [2] 14/9 132/11
section [26] 4/10 4/10 4/11 5/18 6/14
references [5] 4/11 15/19 16/12 91/8
6/17 7/3 7/6 12/6 16/25 18/4 18/23
139/14
37/15 37/17 41/7 43/25 44/1 44/2 91/13
referral [1] 25/3
91/16 94/17 95/3 95/15 96/11 100/24
referred [7] 13/25 25/7 67/11 67/23
125/1
77/20 85/2 156/3
Section 303 [1] 4/10
referring [3] 72/6 72/7 156/4
Section 5.05 [1] 96/11
reflected [10] 4/25 12/13 16/6 61/2
Section 6.05 [1] 5/18
61/10 61/13 163/22 166/8 166/18
Section 6.06 [5] 6/14 12/6 16/25 91/13
166/20
94/17
reflecting [2] 91/20 98/5
Section 6.08 [1] 44/2
reflection [1] 94/10
Section 9.06 [1] 100/24
refresh [1] 116/8
secured [8] 50/2 50/4 50/5 87/14 87/14
refuse [1] 41/23
87/15 87/15 87/16
refused [1] 32/18
security [3] 50/3 76/12 106/20
registered [1] 51/2
Security-related [1] 50/3
regular [1] 29/14
seeking [2] 99/9 99/22
relation [1] 35/3
sees [1] 24/2
relationship [5] 29/8 82/7 107/11
selling [11] 26/8 26/11 26/21 35/19
139/15 151/11
35/25 36/16 124/16 124/19 124/23
relative [3] 157/7 157/9 157/19
125/6 126/19
relatively [3] 37/7 37/9 126/18
Selmore [4] 1/15 64/3 169/8 169/9
release [3] 120/22 121/1 121/2
sending [1] 136/4
releases [1] 125/19
sends [1] 137/1
relevance [1] 165/18
senior [1] 146/4
relied [1] 93/9
seniors [2] 146/3 146/4
relief [1] 56/10
sense [1] 105/21
rely [1] 113/7
Senterfitt [1] 1/19
remain [1] 145/8
September [21] 3/24 4/6 4/13 5/2 11/18
remember [42]
15/10 32/23 32/24 35/20 88/14 89/15
remind [1] 3/4
89/20 89/21 91/10 91/23 114/6 114/17
remote [1] 156/14
121/6 124/8 133/15 155/12
repay [2] 99/2 106/18
September 28 [1] 15/10
repayment [1] 92/5
September 3 [1] 155/12
repetitious [2] 5/10 21/4
September 30 [9] 3/24 4/6 4/13 5/2
replace [1] 69/3
88/14 89/15 89/20 91/10 91/23
report [5] 55/9 55/11 139/4 139/8
September 30th [2] 121/6 124/8
139/12
September 8 [1] 11/18
Reporter [3] 1/21 1/21 170/24
series [3] 19/21 65/11 65/25
S
reporting [1] 132/17
serious [3] 22/16 24/20 128/2
reports [3] 129/24 139/6 165/18
sale [1] 35/11
serves [1] 157/15
represent [6] 11/8 17/19 61/8 65/22
Salopek [3] 1/21 170/23 170/24
service [1] 58/16
91/18 165/11
Sarbanes [1] 156/5
services [2] 103/2 140/15
representation [9] 6/10 17/13 17/15
Sarbanes-Oxley [1] 156/5
Services, [1] 71/16
17/16 17/17 17/25 94/2 97/7 113/8
sat [2] 27/25 38/19
Services, Inc [1] 71/16
representations [6] 4/10 96/3 96/13
satisfactory [1] 19/23
setting [2] 109/2 118/15
109/3 113/7 144/1
satisfied [1] 42/6
settle [1] 105/9
represented [12] 22/16 22/19 87/20
saw [12] 11/25 19/1 28/9 33/8 38/11
seven [1] 142/5
87/21 87/22 88/10 88/18 89/18 89/19
62/8 102/3 107/22 108/3 108/20 164/25 shall [2] 5/20 44/5
96/5 140/20 167/1
166/1
shareholders [1] 157/15
representing [3] 28/19 88/11 122/3
scan [2] 71/19 72/2
Sharpstein [16] 1/17 42/21 43/24 44/19
represents [3] 165/12 166/9 166/9
school [15] 49/9 49/11 78/4 78/9
48/2 63/17 133/23 135/17 135/23 137/4
110/16 128/22 129/1 129/2 129/6
request [17] 10/11 10/13 10/16 10/18
137/13 138/20 169/4 169/5 169/8
56/18 56/21 65/2 80/16 103/25 104/1
130/19 130/21 130/22 131/24 138/21
169/11
104/1 104/8 104/9 139/7 152/16 152/17 141/3
sheet [21] 7/10 9/16 9/24 11/13 11/22
153/12
schools [1] 130/17
12/11 12/16 12/17 12/19 13/4 13/11
requested [5] 12/2 12/2 43/7 52/24
scope [8] 43/6 45/25 147/22 147/25
15/3 15/14 15/18 15/20 16/19 17/18
153/10
148/4 148/5 148/9 148/13
35/2 98/9 122/5 166/2
requesting [3] 149/5 149/7 156/15
scopes [2] 143/24 147/3
sheets [9] 9/1 33/16 33/22 122/2
requests [1] 52/9
Scott [1] 77/11
162/24 163/2 163/19 165/8 166/7
required [15] 6/11 6/15 12/6 29/16
screen [10] 60/14 60/17 60/18 60/20
shelters [5] 129/13 139/21 140/1 140/9
29/24 30/7 41/14 41/16 102/7 102/10
60/23 62/3 63/3 67/6 68/8 137/16
140/11
107/16 108/15 136/11 136/15 138/15
SE [1] 1/19
ship [3] 105/14 119/3 131/14
requirement [8] 6/13 17/23 20/1 20/12 seat [1] 48/18
shipment [2] 104/15 104/16
30/2 31/1 31/21 38/7
SEC [1] 50/1
shipped [1] 103/23
second [15] 21/20 32/17 32/18 42/14 shipping [1] 106/25
requirements [9] 7/23 8/2 8/13 10/9
51/19 51/20 52/3 52/4 56/17 56/21 71/9 shop [1] 130/24
10/12 39/7 54/20 93/23 102/4

resolutions [1] 66/5


respective [1] 160/17
responds [1] 118/22
response [23] 10/11 10/18 14/3 14/14
44/19 54/3 54/6 70/15 86/13 113/2
120/1 123/7 125/23 129/15 131/10
139/5 139/9 139/17 140/4 148/18
149/13 155/8 164/16
responses [3] 50/9 161/1 162/15
responsive [1] 119/13
rest [1] 132/3
restate [2] 32/16 89/5
result [1] 138/11
results [1] 91/14
resume [2] 3/5 77/1
retain [1] 154/12
retained [2] 43/12 43/13
retainer [2] 45/10 116/4
revenue [6] 26/24 36/7 36/8 112/5
125/1 157/23
revenues [7] 26/25 35/7 35/8 35/11
36/9 85/19 157/24
review [3] 86/1 122/10 123/22
reviewed [1] 142/10
Richard [1] 1/17
right-hand [1] 66/11
rights [2] 108/15 108/22
rise [4] 47/15 76/16 134/6 168/6
risk [3] 98/25 106/10 113/23
risks [2] 58/17 112/3
RMR [2] 1/21 170/24
RMR-CRR [1] 170/24
road [6] 27/3 32/22 36/2 161/16 162/12
162/13
role [3] 108/12 113/11 150/16
room [5] 1/22 47/13 83/23 117/4 134/4
rooms [1] 140/16
Royal [8] 109/8 109/14 109/14 128/21
130/2 138/21 141/1 141/3
Rule [2] 141/22 158/8

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185
state [8] 48/19 49/10 57/22 77/9 118/22
141/18 144/7 160/14
shore [1] 109/15
stated [2] 92/1 123/4
shot [4] 60/14 60/17 60/23 62/3
statement [52]
shown [3] 67/3 91/18 120/15
statements [124]
Shutts [9] 22/8 24/14 49/18 49/20
STATES [10] 1/1 1/5 1/12 1/22 48/14
52/15 90/22 91/2 126/4 126/7
57/17 79/11 119/1 141/14 141/22
sic [10] 20/25 49/3 56/15 61/3 61/15
station [1] 56/10
70/18 70/19 89/1 157/15 163/3
stay [2] 141/17 145/3
side [15] 23/1 41/22 79/24 80/15 80/16 Steers [11] 1/14 3/6 47/4 77/2 167/9
82/3 82/5 85/25 90/20 90/20 90/21
169/3 169/4 169/6 169/10 169/11
90/24 122/15 122/17 125/17
169/13
sidebar [2] 141/25 142/20
stenography [1] 1/24
sign [2] 23/18 66/18
step [8] 47/6 57/12 75/8 141/8 146/17
signator [2] 68/21 73/6
146/17 146/22 146/22
signators [5] 67/16 68/16 69/20 69/25 step-by-step [2] 146/17 146/22
71/23
stick [1] 126/22
signatory [1] 74/18
stipulation [1] 64/7
signature [7] 57/1 66/1 66/17 67/12
stop [2] 37/24 58/22
71/19 74/1 136/15
stores [1] 58/14
signatures [1] 66/2
straight [1] 78/20
signed [9] 23/17 56/25 101/5 120/21
Street [1] 1/16
126/3 130/5 132/23 132/23 136/18
structural [1] 40/21
single [2] 42/4 148/2
structure [5] 78/22 82/8 86/5 160/5
site [5] 39/25 83/1 83/11 83/20 105/10 160/7
sites [1] 106/7
structured [5] 78/18 78/19 111/4 111/5
situation [4] 33/25 34/12 129/23
111/6
136/23
structures [8] 40/22 41/2 129/25
size [5] 85/18 99/18 100/11 119/19
130/14 130/17 130/18 131/4 138/24
146/10
structuring [1] 112/18
slightly [1] 99/17
subject [1] 136/5
small [4] 81/3 100/3 113/11 132/25
submit [9] 6/11 6/15 7/2 8/8 10/8 18/11
small/medium [2] 81/3 100/3
18/14 19/6 95/7
SMEF [1] 132/24
submits [1] 19/21
Smith [38]
submitted [24] 3/11 4/18 5/5 5/14 6/6
software [3] 155/24 156/4 156/8
6/7 6/10 7/6 8/9 10/10 16/24 18/13 19/8
sometime [1] 150/21
21/1 33/5 42/22 52/5 82/2 89/2 89/3
soon [1] 84/16
101/9 139/4 160/7 160/8
sophisticated [3] 111/8 111/17 113/6 submitting [1] 8/11
sorts [1] 52/8
subpoena [1] 65/2
sought [2] 88/25 104/8
subsequent [1] 97/10
sound [1] 58/15
subsidiaries [3] 33/20 102/20 159/24
sounds [1] 43/20
subsidiary [3] 34/6 34/6 160/3
south [1] 83/2
subsidiary's [1] 162/8
Southeast [1] 69/21
substantial [2] 35/2 124/6
Southeast, [1] 69/16
sufficient [1] 106/9
Southeast, LLC [1] 69/16
sufficiently [1] 80/15
SOUTHERN [1] 1/2
suit [2] 37/20 83/16
SOX [3] 155/25 156/4 156/5
sum [2] 164/21 166/10
specific [12] 34/13 63/18 90/9 94/10
supermarket [3] 130/24 130/25 131/24
107/20 112/18 114/12 116/24 117/11
supervise [6] 145/21 145/23 146/3
119/13 125/25 155/20
146/4 146/5 146/6
specifics [2] 56/12 109/2
supplier [1] 139/21
spelling [4] 48/20 57/23 77/10 141/19 supplies [1] 103/21
spent [2] 83/23 103/20
support [6] 56/21 58/12 58/13 58/16
spoke [3] 25/22 44/22 52/22
119/1 161/23
sponsored [1] 80/7
supporting [1] 161/15
spot [2] 133/23 167/9
surprise [1] 142/11
spreadsheets [2] 142/15 160/15
Sustain [1] 14/24
spring [1] 37/25
swaps [2] 111/24 113/4
staff [5] 145/2 145/7 145/8 146/2 146/3 sworn [5] 48/17 57/20 57/21 77/7
stage [2] 52/6 147/19
141/16
stamped [2] 40/15 66/11
system [1] 62/14
stand [1] 135/3
systematically [1] 60/5
standards [1] 148/21
T
STANLEY [1] 1/8
start-up [2] 3/4 49/25
Tabernacki [21] 3/23 20/3 27/11 28/13
32/10 34/14 36/6 36/14 36/25 38/19
starting [3] 2/12 75/16 110/20
38/24 57/5 57/6 80/25 83/4 86/18 116/3
starts [1] 143/22

117/15 120/22 120/25 122/16


Tabernacki's [2] 81/1 123/23
tables [1] 83/25
tabs [1] 129/16
take [29] 27/18 32/16 36/7 40/13 47/11
65/20 68/1 71/13 73/1 92/6 99/2 99/18
105/1 105/20 108/19 112/9 115/15
119/18 119/20 120/19 125/1 125/5
125/5 133/24 134/2 144/2 146/17
146/21 149/14
taken [6] 47/20 70/25 75/25 112/4
134/18 146/17
talk [3] 44/20 101/12 161/11
talked [10] 3/10 24/11 25/20 38/20
40/10 73/4 74/1 106/21 128/6 148/14
talking [7] 4/21 19/17 83/3 92/17 113/4
120/5 156/7
talks [5] 91/5 140/13 161/3 161/21
163/19
tank [1] 107/18
tax [1] 157/12
team [15] 79/16 79/18 80/6 80/24 85/22
99/12 115/14 125/15 145/23 146/1
146/7 146/7 146/9 148/14 149/3
teams [1] 79/14
technical [2] 19/16 19/17
telephone [3] 28/3 28/4 150/9
telephonically [1] 114/13
tell [34] 9/17 20/17 24/5 30/5 35/13
41/9 42/25 43/12 50/17 78/4 79/8 81/6
81/25 83/21 84/16 85/7 87/1 90/16 95/2
98/19 103/19 104/21 107/13 109/10
117/13 124/15 124/23 142/25 143/10
144/5 149/22 150/13 151/21 164/1
telling [5] 46/13 46/22 114/16 118/13
118/21
term [12] 7/17 9/13 9/22 10/6 16/22
17/4 18/22 26/8 29/16 39/21 60/15
138/24
termed [1] 111/5
terminology [2] 61/4 61/7
terms [16] 10/14 18/8 19/14 23/7 27/7
30/18 45/6 85/18 95/24 100/7 119/14
125/16 130/14 138/9 146/13 151/15
test [6] 147/5 148/2 148/3 148/5 148/9
148/10
testify [3] 62/25 88/1 114/21
testimony [4] 134/9 134/9 167/22
167/23
testing [2] 147/4 148/8
tests [10] 143/16 143/23 143/24 143/25
147/5 147/5 147/6 148/12 148/12
148/22
Thank [13] 3/7 45/21 47/6 47/8 57/12
57/14 60/11 75/6 75/8 75/10 134/14
141/8 141/10
think [37]
thinking [3] 79/22 98/20 98/24
thought [1] 122/10
threatened [1] 38/10
threshold [1] 138/5
thresholds [1] 138/3
thumb [1] 68/2
tie [2] 83/16 113/25
Tim [6] 141/14 141/16 141/20 155/9
159/18 169/12
time [60]
times [7] 3/4 24/6 42/4 50/22 51/10
52/23 160/6

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185
unaudited [40]
underlying [1] 51/1
timing [3] 100/20 101/10 155/20
understand [14] 2/14 9/15 9/22 15/23
tiny [1] 162/22
82/5 99/13 99/14 111/21 124/17 134/11
title [4] 52/9 81/2 104/24 106/9
135/5 140/5 158/9 167/24
TOLL [58]
understanding [43]
Toll's [8] 2/4 47/23 76/5 134/22 151/7 understands [8] 22/25 26/11 36/5
151/17 151/25 153/14
66/16 68/11 110/8 126/2 128/9
top [8] 8/23 56/2 56/3 56/4 92/8 97/16 understood [4] 30/15 39/25 43/14
162/23 166/5
122/23
total [1] 35/3
undertake [1] 99/12
Touche [3] 151/19 151/22 152/1
undertaking [1] 82/3
tough [1] 147/9
underwriting [12] 82/3 84/24 85/4 85/8
tour [3] 84/2 118/5 118/9
85/10 85/13 85/24 99/16 99/16 100/7
toured [1] 83/10
115/16 136/14
towards [4] 104/13 104/15 108/17
unique [1] 105/1
153/4
UNITED [10] 1/1 1/5 1/12 1/22 48/14
traction [1] 108/8
57/17 79/11 119/1 141/14 141/22
trails [1] 50/8
University [3] 49/10 78/6 144/12
tranche [1] 20/7
Unless [1] 38/10
transaction [13] 31/15 31/16 59/23
unsecured [1] 87/13
61/1 79/20 85/3 102/3 112/19 113/5
unusual [1] 27/23
113/11 113/17 148/2 161/23
updated [3] 68/21 70/11 73/7
transactions [20] 22/13 22/17 27/14
updates [1] 109/18
32/7 34/8 42/5 46/7 66/21 71/24 78/1
upfront [1] 157/20
79/11 79/13 79/15 111/8 111/17 112/18 us [20] 19/2 20/6 20/24 42/6 81/9 82/2
113/16 148/3 148/4 157/24
83/21 91/18 94/1 95/7 132/12 138/1
transcript [3] 1/11 1/24 170/20
138/6 142/6 142/11 146/13 146/17
transfer [14] 59/18 59/22 61/4 61/9
154/13 159/7 164/1
61/12 62/3 62/11 62/15 62/23 63/7 67/1 user [1] 148/6
67/9 67/23 67/24
V
transfers [4] 34/3 66/23 74/5 74/6
transitional [3] 139/21 140/1 140/9
vacation [2] 50/23 52/12
translated [1] 167/3
vague [1] 12/21
transport [1] 61/12
varies [3] 146/10 149/15 149/15
travel [5] 83/5 150/17 150/18 151/4
vary [1] 99/17
151/6
vendors [1] 147/14
Treasury [1] 100/16
venture [2] 26/12 27/1
Trial [1] 1/11
ventures [1] 82/7
trip [1] 116/15
ventureships [1] 26/22
trouble [1] 108/18
verify [1] 30/21
true [20] 4/25 8/3 21/2 21/15 22/9
via [1] 51/9
22/15 22/18 23/23 24/4 24/9 24/22
vice [2] 100/2 132/24
24/25 62/17 62/22 62/24 88/18 89/3
viewed [1] 18/6
96/14 97/8 140/20
violate [1] 41/18
truth [1] 25/17
virtue [1] 20/6
Tuesday [2] 15/10 118/14
vision [12] 41/8 107/8 107/11 107/19
109/6 128/15 139/15 139/20 139/24
Twenty [1] 72/13
139/25 140/8 140/24
two o'clock [2] 75/19 75/22
typical [1] 27/21
visit [8] 83/1 83/17 83/19 84/6 84/15
84/17 84/20 120/3
typically [2] 80/14 146/2
voice [2] 50/8 78/12
U
volunteer [1] 80/18
U-D [1] 57/24
volunteered [1] 80/20
U.S [2] 1/15 103/22
vouching [1] 102/5
U.S. [2] 100/16 129/21
W
U.S. government [1] 129/21
U.S. Treasury [1] 100/16
Wachovia [14] 58/20 58/22 58/25 58/25
59/3 59/9 59/10 59/15 60/1 63/7 64/21
UAE [2] 161/8 162/4
64/21 65/16 69/15
uhm [8] 109/1 109/13 111/20 113/6
138/3 143/22 147/9 149/24
wait [1] 76/12
ultimately [6] 114/6 125/16 125/18
waiting [1] 129/1
144/2 147/6 154/20
waive [6] 2/19 18/18 19/24 48/7 76/19
135/11
Um [10] 62/21 66/3 66/6 68/4 71/2
74/23 99/11 106/23 122/20 128/8
waived [4] 19/25 20/13 30/2 101/4
Um-hum [10] 62/21 66/3 66/6 68/4 71/2 waiver [12] 20/2 20/5 20/6 20/9 20/24
74/23 99/11 106/23 122/20 128/8
21/12 100/20 100/21 101/14 101/16
101/17 102/21
un [2] 18/15 140/16
unacceptable [1] 32/11
waivers [5] 80/1 100/17 100/23 101/3

101/7
warehouses [1] 131/20
warrant [1] 102/12
warranties [6] 4/10 17/25 37/18 96/4
96/13 97/7
warranty [1] 17/13
Washington [2] 78/6 84/22
Washington, [2] 78/11 78/17
Washington, D.C [2] 78/11 78/17
Watts [1] 49/3
Watts-Fitzgerald [1] 49/3
we'd [5] 63/23 87/12 108/24 166/3
166/4
wearing [2] 83/15 83/16
website [2] 152/20 153/1
Wednesday [3] 3/3 53/24 56/6
week [2] 3/1 84/19
weekend [2] 142/4 142/12
weeks [1] 119/22
well-established [2] 24/19 24/19
well-known [1] 139/15
Wells [6] 58/10 58/11 58/19 58/25 59/1
64/21
Wesley [2] 116/16 118/25
who's [3] 66/25 74/17 102/5
Wide [7] 150/17 150/17 151/2 151/4
151/5 151/8 151/11
wife [1] 118/5
William [1] 1/11
willing [4] 126/22 126/24 127/6 127/21
wire [20] 59/22 61/9 61/12 61/25 62/3
62/11 62/15 62/17 62/23 63/4 63/7
66/23 67/1 67/9 67/23 67/24 73/4 74/6
74/17 74/22
wires [3] 60/4 62/10 74/8
withdraw [2] 51/19 120/2
witness [22] 3/17 21/6 47/9 48/13
48/17 53/5 57/10 57/15 57/16 57/21
75/13 77/2 77/5 77/7 135/4 135/19
141/11 141/12 141/16 153/17 158/10
169/2
witnesses [3] 142/5 142/7 169/1
word [4] 9/6 10/1 10/3 113/23
wording [1] 94/10
words [15] 8/22 8/24 12/12 12/13 31/8
33/25 92/7 92/10 93/11 93/11 93/15
93/17 97/17 115/12 130/14
work [40]
worked [18] 28/21 49/15 49/18 50/19
51/5 51/7 51/11 77/22 78/10 78/16 80/7
80/22 81/4 110/18 111/4 112/17 130/6
158/19
working [13] 49/20 52/12 58/22 59/3
59/9 78/1 78/21 80/9 81/24 82/13
111/17 129/25 157/21
works [2] 23/6 105/3
world [20] 33/19 79/13 107/8 107/11
107/19 109/6 110/25 111/2 111/9
121/22 124/20 128/15 139/15 139/20
139/24 139/25 140/8 140/22 140/24
162/7
worldwide [1] 102/18
worthwhile [2] 82/4 85/11
WPD [1] 1/4
write [2] 132/7 132/22
writing [3] 101/5 101/7 116/3
written [2] 75/1 132/21
wrote [2] 115/12 132/6
WV [1] 56/10

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185

Y
year-end [2] 7/10 7/11
year-ended [2] 165/7 165/12
yen [2] 112/6 112/7
York [1] 78/11
you'd [2] 34/11 160/25
young [32] 43/16 43/21 45/10 45/12
103/7 103/9 103/11 126/18 127/10
127/17 143/2 143/3 143/8 143/11
143/21 145/5 145/16 145/17 145/18
146/16 146/20 146/20 150/15 151/24
153/9 154/6 154/9 154/10 154/16
155/18 159/5 162/1

Z
zero [6] 35/14 36/12 67/15 68/10 69/17
125/6
zeros [2] 61/22 66/14
Ziegler [1] 57/4